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OVERSIGHT ON DOMESTIC RENEWABLE FUELS: 

FROM ETHANOL TO ADVANCED BIOFUELS 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

APRIL 13, 2011 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.fdsys.gpo.gov 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

JAMES M. INHOFE, Oklahoma 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

JEFF SESSIONS, Alabama 

MIKE CRAPO, Idaho 

LAMAR ALEXANDER, Tennessee 

MIKE JOHANNS, Nebraska 

JOHN BOOZMAN, Arkansas 

BETTINA POIRIER, Majority Staff Director and Chief Counsel 

RUTH VAN MARK, Minority Staff Director 
(III) 

C O N T E N T S 

Page 

APRIL 13, 2011 

OPENING STATEMENTS 

Boxer, Hon. Barbara, U.S. Senator from the State of California ....................... 1 

Inhofe, James M., U.S. Senator from the State of Oklahoma ............................. 2 

Johanns, Hon. Mike, U.S. Senator from the State of Nebraska ........................ 3 

Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey ......... 5 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware, prepared 

statement .............................................................................................................. 132 

WITNESSES 

Vilsack, Thomas, Secretary of Agriculture, U.S. Department of Agriculture ..... 6 

Prepared statement .......................................................................................... 9 

Responses to additional questions from: 

Senator Carper .......................................................................................... 26 

Senator Inhofe ........................................................................................... 28 

McCarthy, Gina, Assistant Administrator, Office of Air and Radiation, U.S. 

Environmental Protection Agency ...................................................................... 35 

Prepared statement .......................................................................................... 38 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 44 

Senator Carper .......................................................................................... 45 

Kelly, Henry, Acting Assistant Secretary for Energy Efficiency, Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy .............. 46 

Prepared statement .......................................................................................... 48 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 52 

Senator Carper .......................................................................................... 53 

McAdams, Michael J., president, Advanced Biofuels Association ....................... 64 

Prepared statement .......................................................................................... 66 

Responses to additional questions from: 

Senator Carper .......................................................................................... 74 

Senator Inhofe ........................................................................................... 74 

Koninckx, Jan, global business director, Biofuels, Dupont Applied Biosciences, 

E.I. Dupont De Nemours and Company, Inc. .................................................... 76 

Prepared statement .......................................................................................... 78 

Responses to additional questions from Senator Carper .............................. 83 

Kiser, Kris, executive vice president, The Outdoor Power Equipment Institute ........................................................................................................................ 86

Prepared statement .......................................................................................... 88 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 99 

Senator Carper .......................................................................................... 101 

Faber, Scott, vice president of Federal Affairs, Grocery Manufacturers Association .................................................................................................................... 103

Prepared statement .......................................................................................... 105 

Responses to additional questions from: 

Senator Carper .......................................................................................... 108 

Senator Inhofe ........................................................................................... 109 

Coleman, Brooke, executive director, Advanced Ethanol Council ....................... 111 

Prepared statement .......................................................................................... 113 

Response to an additional questions from Senator Carper ........................... 125 
Page

IV 

ADDITIONAL MATERIAL 

Overview, Impacts of Mid-Level Ethanol On-road and Non-road Engines and 

Equipment, prepared by Dr. Ron Sahu, May 15, 2009 ..................................... 133 

Letters: 

Several organizations regarding Petition for Rulemaking Under the Clean 

Air Act to Require the Continued Availability of Gasoline Blends of 

Less Than or Equal to 10 percent Ethanol ................................................. 155 

Simonsen, Gerald, chairman, Board of Directors, National Sorghum Products ................................................................................................................. 161 

Statements: 

Cox, Craig, senior vice president for Agriculture and Natural Resources, 

Environmental Working Group ................................................................... 164 

Gilligan, Dan, Petroleum Marketers Association of America (PMAA) ......... 169 

National Association of Convenience Stores (NACS) .................................... 171 

Feraci, Manning, vice president of Federal Affairs, National Biodiesel 

Board .............................................................................................................. 178 

Elam, Thomas, president, FarmEcon LLC, on behalf of the National 

Turkey Federation ........................................................................................ 183 
(1) 

OVERSIGHT ON DOMESTIC RENEWABLE 

FUELS: FROM ETHANOL TO ADVANCED 

BIOFUELS 

WEDNESDAY, APRIL 13, 2011 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

Washington, DC. 

The full committee met, pursuant to notice, at 10:05 a.m. in room 

406, Dirksen Senate Office Building, Hon. Barbara Boxer (chairman of the committee) presiding. 

Present: Senators Boxer, Inhofe, Lautenberg, Whitehouse, Udall, 

Merkley, Johanns and Boozman. 

STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM 

THE STATE OF CALIFORNIA 

Senator BOXER. Welcome to this important hearing. 

This hearing will focus on the Federal Government’s efforts to increase our Nation’s energy independence by expanding our Nation’s 

production of renewable fuels. President Richard Nixon recognized 

the need to reduce our dependence on foreign energy when he created Project Independence. That was in 1973. We are still working 

at it. It goes on. 

In 2005, Congress set goals of production of renewable fuels and 

in 2007 Congress expanded the goals. Congress also called for the 

increased use of fuels such as cellulosic ethanol and advanced 

biofuels which can turn waste into fuel. 

Just this March, President Obama redoubled the Federal Government’s commitment to energy independence and the use of renewable fuels when he issued the blueprint for a secure energy future. When he released this study, he emphasized our Nation must 

discover and produce cleaner renewable sources of energy that also 

produce less carbon pollution which is threatening our climate. 

That is his quote. 

The President also highlighted the support that our armed forces 

have for the use of biofuels. The Air Force has the Raptor 22, a jet 

that flies faster than the speed of sound using a fuel blended with 

biofuels. The Air Force has a goal of getting half of its domestic jet 

fuel from alternative sources. 

I support the use of advanced and cellulosic biofuels and believe 

the Federal Government should be developing stronger initiatives 

to promote their use. 
2 

Today’s oversight hearing on the Renewable Fuels Standard will 

help us better understand the current status of these critical issues 

and I look forward to hearing from our witnesses. 

I am also happy to call on my friend, my Ranking Member. 

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 

THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Madam Chairman. This is one of 

the times when I can just say I agree with you and then not have 

an opening statement. 

Senator BOXER. Could you say that again? Could you say that 

again? 

[Laughter.] 

Senator BOXER. Because it sounds so great. 

Senator INHOFE. Do not get your hopes up. 

[Laughter.] 

Senator INHOFE. First of all, Secretary Vilsack, I am very happy 

to have you here. I am also from Iowa, so I know of the background. I know that the subject here today is going to be pretty 

much, it is not partisan, but it is geography, and so we understand 

that. 

First of all, I want to mention that there is a lot of discussion 

on the corn-based ethanol. I have legislation that I, we have not 

started trying to get co-sponsors and all that, but it is to opt out. 

What it does, to opt out a State has to pass a bill, signed by the 

Governor, stating its choice. 

It does not mean that they cannot use, if they want to use, all 

the corn ethanol or anything else they want to use. But it means, 

as is in the case of my State of Oklahoma today, not in Virginia, 

not in Maryland, not in the District, but in Oklahoma, that if you 

want to use clear gas, as it is called, without any of the corn ethanol, you can do it. 

So, it does not, it would be very hard to argue against it because 

you are giving people the choice. You can either have it or you do 

not have to have it. 

I think with the passage of the 2007 Energy Bill that Congress 

blundered in pushing too much of the corn ethanol too fast, and the 

ethanol has serious problems including its compatibility with existing engines and its environmental sustainability as well as its 

transportation infrastructure needs. 

I think we have some witnesses that we are going to be able to 

get some answers from on the next panel, and you may want to address this also, that the overly aggressive ethanol mandate has led 

to a particularly pronounced consumer backlash, not just in my 

home State, but I suspect all around. You have a lot of these engines, small engines, farm engines, that can run on, they can make 

it on maybe E10 but not on anything more than that. So, that is 

a problem that we have. 

I recognize people like my very good friend, Senator Johanns, is 

from a corn State. Oddly enough, I am from a corn State, too. But 

I would like to have the people in my State of Oklahoma have that 

choice. So, we are going to be having a chance to talk about this 

as opposed to just doing away with subsidies, just offering the 

choice. 
3 

Now, I think that we are for all of the above. We have to do it. 

I do not talk about this in terms of our dependence on foreign countries for our ability to produce energy because our problem is we 

have all the energy we need in America, but politically we cannot 

get at our energy. But that is not really the subject of this thing 

today. 

So, I look forward to the hearing and I think we will find a lot 

of agreement. 

[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE

STATE OF OKLAHOMA

I’d first like to thank the Chairman for holding this timely hearing. I’m working 

on introducing a simple bill that responds to the increasing call for more consumer 

choice to purchase ethanol-free gasoline. Simply put, my bill is a compromise that 

allows a State to opt out of the corn ethanol portions of the renewable fuel standard—if you want to use ethanol you can use it. 

To opt out, a State must pass a bill, signed by the Governor, stating its choice. 

The opt-out would be recognized by the Administrator of the EPA, who would then 

reduce the amount of the national corn ethanol mandate by the percentage amount 

approved by the State in question. 

This legislation would allow a State to opt-out of only the corn ethanol mandate. 

It would not affect other portions of the renewable fuel standard, such as the cellulosic or advanced biofuels volumetric requirements. 

With the passage of the 2007 energy bill, I believe Congress blundered in pushing 

too much corn ethanol too fast. Ethanol has serious problems, including its compatibility with existing engines, its environmental sustainability, as well as its transportation and infrastructure needs. These problems have galvanized an unusual coalition against corn-based ethanol. Opponents range from Friends of the Earth and 

the Environmental Working Group to the National Marine Manufacturers Association and the National Petrochemical and Refiners Association. 

This overly aggressive ethanol mandate has also led to a particularly pronounced 

consumer backlash in my home State of Oklahoma, where one convenience store 

chain experienced a 30 percent drop in fuel sales once they began selling fuel blended at E–10 levels. 

Despite the drawbacks of today’s corn-based ethanol mandates, I do support a role 

for ethanol and other biofuels. The idea that we can grow and produce biofuels all 

over the country—not just in the Midwest—is something worth pursuing—and 

that’s why I support research into a variety of advanced feedstocks and alternatives 

such as algae, bio-butanol, cellulosic, natural gas, and other options. 

I believe America’s energy supply should be stable, clean, diverse, and affordable. 

Continued development of home-grown biofuels translates into energy security and 

creates jobs and economic growth in America. 

On that note, I look forward to working with each of you to explore the unintended consequences of this mandate and how we can improve the Renewable Fuel 

Standard. 

Senator BOXER. Well, that is good. 

Senator Johanns, welcome. 

STATEMENT OF HON. MIKE JOHANNS, U.S. SENATOR FROM 

THE STATE OF NEBRASKA 

Senator JOHANNS. Madam Chair, thank you very much. 

Mr. Secretary, it is good to see you again. 

I appreciate the opportunity to just offer a few words before we 

get started today. I think, as everybody knows, I have long been 

a supporter of renewable energy sources, including ethanol specifically. As a former Governor, I worked to create new incentives for 

ethanol production, did all I could to increase the ethanol blend in 

gasoline to address the environmental concerns which we often-
4 

times forget related to MTBE use. As Secretary of Agriculture, I 

worked with others in the Cabinet to promote renewable energy. 

Agriculture is a part of the solution, not only for the short-term, 

but for the long-term domestic energy needs. Renewable fuel production increases our energy security and decreases our dependence on foreign oil. 

Currently, around 60 percent of our oil is imported from other 

countries. We are very energy dependent. We all agree that we 

have to take steps to become less reliant on other nations, for our 

energy needs. Renewable fuel production, including ethanol, can 

play a role. 

The production and use of 10.6 billion gallons of ethanol in 2010 displaced about 445 million barrels of oil and it kept $34 billion in 

the United States’ economy. We have invested in domestic renewable fuels, we have built the infrastructure, we have hired good 

people and it has been a boost to our rural economy. 

In 2010, the ethanol industry supported more than 400,000 jobs in the United States. It contributed $53.6 billion to the National 

Gross Domestic Product and generated $11 billion in tax revenues. 

Nebraska is the second largest producer of ethanol in the United 

States. Currently, the State has 24 plants with a combined production capacity of over 1.8 billion gallons annually. These plants represent $1.4 billion in capital investment and employment of roughly 1,000 Nebraskans. While ethanol production helps sustain profitability for corn producers, its byproduct, distiller grains, adds value 

to our livestock sector. 

Today, the renewable fuels industry is at a critical point. That 

is why I appreciate this hearing, Madam Chair. We need to do everything we can to look at the whole picture here because I think 

that we all agree that what we are doing here can have a profound 

impact on our energy dependence on other countries in the future. 

With that, I will look forward to the hearing and the opportunity 

to ask questions. 

Thank you. 

[The prepared statement of Senator Johanns follows:] 

STATEMENT OF HON. MIKE JOHANNS, U.S. SENATOR FROM THE STATE OF NEBRASKA

Thank you, Chairman Boxer, for calling this important hearing today. Today’s 

hearing focuses on a topic which is important to many in my home State and across 

our country. I have long been a supporter of renewable energy sources, including 

ethanol. 

As Governor, I worked to create new incentives for ethanol production and increase the ethanol blend in gasoline to address environmental concerns from MTBE 

use. 

As Secretary of Agriculture, I worked with others in the Cabinet to promote renewable energy as a way to reduce our dependence on foreign oil. Agriculture is part 

of the solution not only for the short-term but for our long-term domestic energy 

needs. Renewable fuel production increases our energy security and decreases our 

dependence on foreign oil. Currently, around 60 percent of our oil is imported from 

other countries, many with which do not share our values. We have to take steps 

to become less reliant on these nations for our energy needs and more reliant on 

domestic sources. 

Renewable fuel production, including ethanol, can play a role. The production and 

use of 10.6 billion gallons of ethanol in 2010 displaced over 445 million barrels of 

oil and kept $34 billion in the U.S. economy. We’ve invested in a domestic renewable 

fuels industry. We’ve built infrastructure. We’ve hired good people. 

Ethanol production boosts rural economies. In 2010, the ethanol industry supported more than 400,000 jobs in the United States, contributed $53.6 billion to the 
5 

national Gross Domestic Product, and generated $11 billion in tax revenues. Nebraska is the second-largest producer of ethanol in the country. Currently, the State 

has 24 operational ethanol plants, with a combined production capacity of over 1.8 

billion gallons annually. These plants represent over $1.4 billion in capital investment and provide employment for roughly 1,000 Nebraskans. While ethanol production helps sustain profitability for corn producers, its byproduct—distillers grains— 

also adds value to the livestock sector, particularly Nebraska’s beef producers. 

Today, the renewable fuels industry is at a pivotal point—tax credits expire at the 

end of this year; some have concerns about using potential food or feed sources for 

fuel; we are seeing increases in energy costs across the board. And, at this point, 

three key factors come to mind: 

(1) The increased productivity of American agriculture continues to amaze me. 

Farmers are growing more corn per acre every year. In 1980, U.S. farmers produced 

about 6.6 billion bushels of corn. By 2010, that number had nearly doubled to 12.4 

billion bushels. And, due to significant advances in efficiency, that production increase was accomplished on almost exactly the same amount of land—about 85 million acres. 

(2) Ethanol has been and will continue to be part of our domestic energy solution. 

We’ve built the infrastructure. We have industry investing in next generation technologies. We cannot turn our backs on this good work. 

(3) Renewable fuels are not some faceless adversary. This industry represents 

thousands of jobs in rural communities. When we are looking at employment numbers across the country, renewable fuels jobs in my State and elsewhere have been 

key in weathering our economic challenges in recent years. 

I think everyone on this panel can agree that these issues are complex and abrupt 

changes in policy could have real impacts on domestic energy sources, jobs, and local 

economies. As such, I look forward to engaging in a thoughtful discussion of renewable fuels policy with my colleagues on this committee and others in the Senate in 

the weeks and months ahead. 

I look forward to hearing from our witnesses today and learning from their perspectives on an industry that is very important to the State of Nebraska and the 

lives of many others across our Nation. 

Senator BOXER. Thank you so very much. Do you want us to put 

your full statement in the record? 

Senator JOHANNS. Yes, that would be great. 

Senator BOXER. We will do that, as with everyone. 

Senator Lautenberg, we have gone down to just 3 minutes per 

person because we have three panels. So, you are recognized. 

STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR 

FROM THE STATE OF NEW JERSEY 

Senator LAUTENBERG. Thanks, Madam Chairman. 

Next week marks the first anniversary of the oil spill disaster in 

the Gulf of Mexico, our country’s worst environmental catastrophe 

and a harsh reminder about our addiction to oil. 

Under President Obama’s leadership, we are finally taking steps 

to kick this dangerous addiction by investing in better and smarter 

ways of moving people and goods. This includes creating a national 

high speed rail network, which I was disappointed to learn today 

has been on the chopping block for the naysayers. This includes 

creating a national high speed rail network and expanding the 

number of electric cars on America’s roads. 

Of course, bullet trains and plug-in vehicles alone will not break 

our addiction. We must also invest in cleaner, cheaper fuels to 

power the Nation’s automobiles. 

But I have serious concerns about corn ethanol’s ability to serve 

as one of the leading alternatives. The fact is corn ethanol is only 

slightly better for the environment than gasoline. Sometimes corn 

ethanol is more harmful. 
6 

To make room for corn crops, forests are cut down, grasslands 

are plowed, the equipment that farmers use to grow, harvest and 

ship corn is powered by burning fuel which produces more emissions. Growing corn requires enormous amounts of fertilizers and 

pesticides which can runoff in the rivers and seriously damage marine ecosystems, including creating so-called dead zones in the 

water. 

Additionally, using corn for fuel instead of food drives up prices 

for people already struggling to put food on the table. Economists 

agree that steady growth and demand for ethanol has helped raise 

food prices including costs in the United States where almost 40 

percent of the corn crop is grown for fuel, not food. 

Corn ethanol also increases our deficit because the industry receives billions of dollars in wasteful subsidies. For every gallon of 

ethanol produced in the United States, taxpayers have to pay 45 

percent. I will call it a ransom. 

Last year alone, the tax credit deprived the Treasury of more 

than $5 billion in revenues, according to an audit by the Government Accountability Office, which determined the industry is mature enough to stand on its own two feet. 

The Wall Street Journal editorial page agrees. They urged Congress, 2 weeks ago, to end ethanol subsidies that are driving up the 

cost of food and fuel with no benefit for the environment or American energy security. 

Instead of making taxpayers support this industry, we should invest in cleaner fuels such as cellulosic ethanol which is made from 

waste products and non-food crops. Cellulosic ethanol will not drive 

up the cost of food, it will not drive up the planet’s temperature 

by generating carbon pollution or other greenhouse gases. 

Madam Chairman, I ask for unanimous consent that my full 

statement be included in the record. 

Senator BOXER. Without objection. Thank you. 

[The prepared statement of Senator Lautenberg was not available at time of print.] 

Well, welcome, Mr. Secretary. We are very happy to see you here 

and just the press of business today is major. We have three panels. So, we are going to ask you to start. If you could keep to 5 minutes and then answer our questions. 

STATEMENT OF THOMAS VILSACK, SECRETARY OF 

AGRICULTURE, U.S. DEPARTMENT OF AGRICULTURE 

Secretary VILSACK. Thank you, Madam Chair. Thank you very 

much for the opportunity and I will stay within the 5-minute time 

period. 

I would ask that our statement that we provided be put in the 

record, and I would like to speak from the heart for just a few minutes about renewable fuels. 

Senator BOXER. Yes, without objection. 

Secretary VILSACK. Let me put it in context. Ninety percent of 

the persistent poverty counties in this country are located in rural 

America. Rural Americans earn $11,000 per capita less than their 

urban and suburban counterparts. More than half of the rural 

counties in this country have lost population in the last census. 
7 

The reality is that there has been a history of unemployment and 

poverty at higher levels in rural America. 

The ethanol industry and the renewable fuel industry now has 

400 biorefineries located in 46 States which, according to a report 

commissioned by the Renewable Fuels Association titled ‘‘Contribution of the Ethanol Industry to the Economy of the United States,’’ 

is helping to produce more than the 400,000 jobs that Senator 

Johanns referred to. One point nine million of the 2.1 million farmers in this country simply do not make, on average, enough money 

from their farming operation to support their families, which is 

why it is important and necessary for us to look for alternative 

ways for farmers to succeed. 

We continue to import far too much oil from other countries. Seventeen percent of our imported oil comes from the Persian Gulf, a 

very unstable place today. 

When the Congress established the Renewable Fuels Standard goals, what you did is created the opportunity for over $100 billion 

of capital investment in rural communities, the opportunity and 

the chance to produce more than 1 million jobs in rural America, 

increased income opportunities for farmers, and reducing our dependence on that foreign oil from unstable sources. 

At USDA, we have continued the work of then-Secretary Johanns 

and others to meet the challenge of that Renewable Fuels Standard. We have established five regional feedstock research development centers focused on feedstock development, sustainable production systems, and biorefining. We are looking for alternative 

ways in addition to corn-based ethanol to be able to produce 36 billion gallons of renewable fuel. 

We have provided five commitments to biorefineries that are located in parts of the country other than the Midwest, and we look 

forward to meeting the President’s challenge of breaking ground on 

four additional biorefinery plants in the very near future. These 

plants will focus on feedstocks other than corn-based ethanol. 

We continue to provide assistance and help to biorefinery producers who are using advanced biofuel production mechanisms. 

There are now 30 pilots in operation around the country. 

We just recently announced an effort to expand a more convenient ethanol supply for consumers by using some of our REAP 

funding to permit and to incentivize blender pumps throughout the 

country. 

We are continuing to operate the Biomass Crop Assistance Program (BCAP) program notwithstanding the reductions that occurred as a result of the budget deal that was recently announced. 

Let me respond, in the minute and a half that I have left, to 

some of the frequent arguments about ethanol. 

First of all, the issue of food prices. It is important to point out 

that farmers only get 16 cents of every food dollar. Eighty-four 

cents goes someplace else. I think, based on the 2008 study of what 

happened when food prices went up the last time, we saw that ethanol production was responsible for one-tenth of the increase. I suggest that perhaps the issues of energy costs today are more responsible for increasing food costs than ethanol production. 

Some have suggested that ethanol is not efficient from an energy 

producing and utilization perspective. Today’s ethanol production 
8 

systems generate 2.3 BTUs for every BTU used, which is actually 

a better ratio than oil. When we reach the 36 billion gallon threshold, 138 metric tons of CO2 equivalent will be reduced from the atmosphere, the equivalent of taking 27 million cars off the road. 

The most important point I can make today is that we need to 

redefine this debate. Instead of trying to limit America’s opportunities, particularly in rural areas, we need to look for ways in which 

we can expand opportunities. We should not doubt the capacity of 

American farmers and ranchers to be able to produce the feedstocks, beyond corn-based ethanol, to be able to meet the 36 billion 

gallon requirement. 

I realize there is work to do and we have to accelerate our pace. 

But we are committed to making that happen at USDA. 

Thank you, Madam Chairman. 

[The prepared statement of Secretary Vilsack follows:] 
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Senator BOXER. Thank you. 

I have decided to ask Senator Inhofe to go first and I will close. 

So, we will go from Senator Inhofe to Senator Lautenberg to Senator Johanns and then I will close. 

Senator INHOFE. OK. Well, thank you, Madam Chairman. 

I listened carefully and I happened to tune in on a, I know this 

huge corn ethanol lobby that is out there. There is a program on 

National Public Radio I happened to hear on Sunday and they 

went into all of this detail arguing, refuting everything that my 

people in Oklahoma tell me. Because I did not have a dog in this 

fight. But I ended up, because of choice, objecting to even the initial mandates. 

Now, I guess you are saying, you are trying to overcome the arguments that the, a high percentage of corn ethanol is not good on 

engines and the top one on the marine manufacturers, the small 

engine manufacturers, that is their No. 1 issue right now. They say 

that some of these engines can operate on E10 but nothing more 

than that, it is damaging to those even then. So I want you to respond to that. 

But also, on April 8, you announced a plan to install, let us start 

with this one, 10,000 flexible fuel pumps nationwide within 5 

years. Now, I would ask you, do you have any estimate how much 

this will increase corn ethanol production and what kind of budget 

would there be for this? 

As I understand, these flexible fuel pumps give you a range, I 

guess the dollars are adjusted with it, all the way from clear gas 

to what is the highest level of, E85? Yes, E85. Well, what do you 

think about, if that is a possibility, the bill that I have, I am going 

to pull it because we will not need it anymore. 

Secretary VILSACK. Well, Senator, first of all I think it is important to point out that the utilization of corn-based ethanol to meet 

the 36 billion gallon threshold is capped by Congress at 15 billion 

gallons and we are very close to getting to that cap. 

It is also very clear that our attention needs to be focused on alternative sources, alternative feedstocks. We are looking at algae, 

woody biomass. 

Senator INHOFE. Yes, I agree. 

Secretary VILSACK. So, the other 21 billion gallons is going to be 

from sources other than corn-based ethanol. Corn-based ethanol is 

still going to be a viable mechanism for getting to that 36 billion 

gallons, but it is capped. 

As far as the flexible fuel pumps are concerned, this basically 

provides a more convenient ethanol supply and should increase the 

use of renewable fuels, not necessarily corn-based ethanol, because, 

again, it is capped. 

Senator INHOFE. But they would start with what we refer to as 

clear gas then on a flexible pump? Is that what you envision? 

Secretary VILSACK. As I understand it, what it would be is you 

would have a pump that would give you the appropriate blend of 

ethanol. I am not sure that it would necessarily be zero blend—— 

Senator INHOFE. Oh, I see. OK. 

Secretary VILSACK. Because of the nature of the pumping and 

distribution systems, it would be 10 percent ethanol, 15 percent 

ethanol, in some cases 20 percent ethanol, and some States have 
30 

that mandate 85 percent ethanol. It would make it more convenient to get the level of ethanol that you need for your vehicle and 

hopefully it would encourage the development of more flexible fuel 

vehicles. 

Senator INHOFE. OK. If that is the case and you stated that we 

are near the cap anyway, what would be the objection to passing 

a bill, like my legislation, that does not reduce what you want to 

have if you want to have corn ethanol or any other type of ethanol, 

but merely says that you have a choice within a State if the State 

legislature asks you to do it so that if you want to have clear gas 

you can. The choice is there. 

Now, if we are already close to the cap, why, what would be the 

argument against that? 

Secretary VILSACK. Well, we still have a long way to go to meet 

the 36 billion gallon threshold that Congress has set. We have to 

figure out ways in which to produce that 21 billion gallons of different type of fuel, cellulosic—— 

Senator INHOFE. But right now that would have to be corn ethanol though, would it not, where technology is? 

Secretary VILSACK. No. No. Right now, once we hit the 15 billion 

gallon threshold, we have to go to a different approach to producing 

renewable fuel. We have to go to cellulosic ethanol that could be 

using corn stover, not the kernel but the husk or the cob. It could 

be biofuel made from algae. It could be woody biomass. It could be 

landfill waste. It could be animal waste. All of those, and many 

other ways of producing—— 

Senator INHOFE. The technology is coming. I understand that. 

We, actually in my State of Oklahoma, we are experimenting with 

that. In fact, I went up to California in 2008 where they are talking 

about the algae and the successes already. That is all great. 

I am talking about where technology is today, and even when the 

time comes, why would it not be a good idea to have it marketbased so that if somebody like my wife, who will not put corn ethanol in her car, would not have to do it? In other words, we would 

have the choice. 

Secretary VILSACK. Well, some States currently provide that 

choice, No. 1, and 87 percent of the gas that is produced today is 

an ethanol blend. So, I mean, consumers have made a choice. I 

know in my State we gave folks a choice and we see close to 80 

percent of consumers opting to use ethanol and they like it for a 

multitude of reasons, not the least of which it helps American 

farmers and ranchers. 

Senator INHOFE. Well, I would say, I could make the same, you 

are making my case for me because in my State, just the reverse 

is true and the farmers and ranchers’ concern there is the cost of 

feedstock, and our cattle people, our poultry people. Anyway, that 

makes the case for a choice, I believe. 

Senator VILSACK. Well, the other problem is whether or not the 

choice can be an environmentally equivalent choice, and I am not 

sure that that is necessarily the case with the clean—— 

Senator INHOFE. Well, the environmentalists support my legislation, so I do not think you ought to use that argument. 
31 

Secretary VILSACK. Well, I am deeply concerned about water 

quality which is what led us into this, the beginning of this conversation, many, many years ago. 

Senator INHOFE. OK. Thank you, Madam Chairman. 

Senator BOXER. Senator Lautenberg, I am going to ask you to go 

next. I am going to wait. 

Senator LAUTENBERG. Thanks, Madam Chairman. 

Thanks, Mr. Secretary, for your presentation. When, as you 

make the case, one cannot help but be sympathetic to what might 

develop as job loss, or opportunity, especially when the people who 

are growing that corn for ethanol believe that they were doing the 

country a favor by doing that. As it turns out, we learn as we go 

and it is not dissimilar from the coal dilemma where it is available, 

abundant, and yet it brings on terrific environmental problems. 

The one thing that came up now, as a result of our discussions, 

a New York Times article yesterday said, it is entitled ‘‘High Prices 

Sow Seeds of Erosion’’ and they say long and defined erosion is 

once again rearing as a threat because of an aggressive push to 

plant on more land, changing weather patterns and inadequate enforcement of protections, scientists and environmentalists say. 

So, what, where do we go from here in terms of satisfying the 

need for the country to have a better environmental response to its 

energy use and job losses? When we look at this, American taxpayers give more than $7 billion in subsidies to biofuels every year, 

with most of that going to corn ethanol. Given that Federal law already mandates an increasing amount of biofuels to be used every 

year until 2022, what is the net gain for our taxpayers? 

Secretary VILSACK. Well, Senator, 400,000 people are employed 

according to the Renewable Fuels Association. We found out when 

Congress did not continue the biodiesel tax credit that the impact 

of that was, for a period of time, 50 percent of the production went 

down immediately and, according to the National Biodiesel Board, 

12,000 jobs were lost immediately. 

Our view, and my view, is that I think we ought to be asking 

a different question about those incentives, whether or not they 

could be used for this maturing industry in a more effective way 

to grow the industry. I do not think there is any question that you 

all will over time, and should over time, reduce those incentives, 

but I think if you create a cliff, you are going to create a significant 

job loss in rural America at a time when we are just now beginning 

to turn the corner in terms of the economy. No. 1. 

No. 2, you could use those incentives effectively to produce greater, more convenient supply and to encourage more flexible fuel vehicle production and purchase, which would be beneficial in terms 

of creating more jobs and more opportunity. 

No. 3, if I can, I just want to comment on the issue of the New 

York Times article. I think the New York Times article failed to realize that we are investing a substantial amount of money, particularly in the Upper Mississippi River Basin, on conservation practices. 

We have just announced another general sign up for the Conservation Reserve Program (CRP) and we have received a number 

of inquiries from farmers across the country in that program. We 
32 

are very cognizant of our need for continued commitment to conservation and you are going to continue to see a commitment. 

In fact, we are also gauging the impact of that conservation. Our 

recent assessment in the Upper Mississippi River shows that there 

is a substantial commitment to conservation by producers and that 

it is actually reducing phosphorous and nitrogen going into our rivers and streams and, ultimately, into the Mississippi River. 

So, there is a significant commitment there. 

Senator LAUTENBERG. Well, I appreciate that and I believe it is 

well intentioned. The problem is that we are now in the State 

where erosion, other violations of a better environment, continues 

to exacerbate the problem. The question is, how do we catch up? 

Mr. Secretary, one thing that ran through my mind as I was listening to you, was whether or not there ought to be a transfer of 

funds as we reduce these subsidies, perhaps to give farmers a 

chance to find other purposes for their product. 

Now, with food shortages, and there are food shortages, that is 

demonstrated by higher prices, that may give them a chance to 

convert back to something that is less harmful in terms of the environment but keeps them producing for themselves and their families. 

I think something like that has to be examined, whether or not 

we penalize the car driver now, the user, and a result of trying to 

keep, just looking at the focus on jobs is kind of a difficult equation 

and I think we have to work with it. But I do not think we can 

afford to stop looking for that change. 

Secretary VILSACK. Senator, if I can just respond? I think you are 

headed in the right direction in terms of the right question to ask. 

Rather than trying to suggest that American farmers and ranchers 

are limited in their capacity, we ought to be looking for ways in 

which we can expand their capacity. 

There is an interesting study from Michigan State and Penn 

State about the possibility of double cropping which would essentially create more feedstock opportunities on corn and soybean 

land. It would create additional income opportunities for farmers. 

It would be better for the environment. It would address the erosion issue, although we have seen a 69 percent reduction in soil 

erosion as a result of our investment in conservation programs in 

the Upper Mississippi River Basin. 

So, I think there are ways in which we can look at a different, 

redesigned agricultural production system that addresses some of 

your concerns. 

I would say that there are many reasons why there are food 

shortages globally, but none of them have to do with American 

farmers and ranchers in the sense that we continued to be extraordinarily productive. We have seen a 300 percent increase in corn 

production in my lifetime, a 200 percent increase in production of 

soybeans. 

Storms, drought, floods in other parts of the world, export controls that were imposed by other countries, the currency issues, 

there are a multitude of reasons why we have some of the shortages that we see today in other parts of the globe. 

Senator LAUTENBERG. Madam Chairman, the one thing that I 

think that we have to consider is having, reducing the punitive tar-
33 

iff on imported ethanol, sugar, reduce that and let the competitive 

marketplace decide where they want to go, and advertise what the 

damage does or does not do to the environment. 

Thanks very much, Mr. Secretary. 

Senator BOXER. Thank you very much. Senator? 

Senator JOHANNS. Madam Chair, thank you. 

Mr. Secretary, remembering the days when you and I were both 

Governors, the year 2000, tough, tough time in our States, we had 

a situation where agriculture was really, really struggling. If I remember correctly, and I am drawing this off from memory, I think 

the Ag subsidies in the year 2000 were like $30 billion. It was a 

historic amount. Congress doubled the AMPTA and just a whole 

bunch of things going on. 

Compare those days to the support, if you will, relative to ethanol. I would just like to get a frame of reference as to how we 

have reduced those subsidies over the last decade. 

Secretary VILSACK. Well, we have reduced the per gallon credit, 

tax credit, to ethanol by a significant amount recently. In terms of 

overall Ag subsidies, many of them are not even being utilized, in 

large part because the Ag economy is healthier than it was in 2000. 

One of the reasons that it is healthier is, in part, because of the 

opportunities that biofuels and renewable fuels present. 

As you well know from your days as Secretary, many farmers are 

required to have off farm income in order to keep the farm. Those 

400,000 jobs supported by biofuels production are extraordinarily 

important in those rural communities. When you have the opportunity to produce another 400 or 500 biorefineries and an opportunity to use a waste product that no longer has value, that too can 

result for a lack of need for that safety net that it important. 

We all, in a sense, benefit from that safety net. It is not just the 

farmers. It is all of us because we are, in a sense, self-sufficient 

from a food perspective in this country and we pay less for our food 

than most other people on this globe, which gives our citizens a lot 

more flexibility with their paycheck than anyplace else. 

Senator JOHANNS. Mr. Secretary, speaking specifically of food, in 

the USDA, studies on the price of food on an ongoing basis, primarily because the USDA is very definitely in the food business, 

there is always this rap against ethanol when food prices increase 

that, oh, it is because of ethanol. 

Recently, in the Financial Times, you said something that caught 

my attention: ‘‘The production of corn-based ethanol does not deserve the scapegoat reputation it has too often assumed in this conversation.’’ I would like you to explain what you mean by that. 

What are thinking of in terms of the relationship of ethanol to 

other costs in food production? 

Secretary VILSACK. Well, first of all, I think it is important to 

recognize that, as I said, American farmers are the most productive 

in the world and they continue to be productive. They have embraced innovation. We are going to continue to see yields increase 

and continue to see production increase because of American ingenuity. 

I would expect and anticipate this year you are going to see higher yields in part because of decisions that folks are making, but not 

necessarily resulting in any more environmental damage. No. 1. 
34 

No. 2, we did a study in 2008 when food prices went up and we 

asked the question, how much of this is a result of ethanol? I was 

surprised, and I think you might have been surprised as well, to 

find that when food prices went up 45 percent, one one-tenth of 

that increase was from ethanol. 

That stands to reason when you recognize that farmers only get 

16 cents of every food dollar. Eighty-four cents goes someplace else. 

It goes to the folks who refrigerate, package, process, truck, shelve, 

and all of that relates to energy costs. So, when oils go up, that is 

obviously a reason and a driver. 

No. 3, there are a lot of reasons why, globally, we are faced with 

potential shortages that have nothing to do with ethanol. They 

have to do with drought in some parts of the world, they have to 

do with export controls imposed by some countries like Russia, they 

have to do with the fact that technology has not been embraced in 

some parts of the world as it has in the United States and so people are not as productive as they potentially could be. So, there are 

a multitude of reasons here. 

But to suggest that ethanol is the reason when you have increased productivity of American farmers, when you have so little 

of the food dollar going to the farmer, when you have multiple reasons outside of the United States that are responsible for any 

shortages that might exist, it just does not, to me it is just not fair. 

Senator JOHANNS. Thank you, Mr. Secretary. Thank you, Madam 

Chair. 

Senator BOXER. Thank you. 

Mr. Secretary, you said we are nearing the 15 billion gallons? 

You said we are nearing the 15 billion gallons where you get the 

subsidy? 

Secretary VILSACK. Right. We have plant capacity today, online, 

of roughly 14.2 billion gallons of ethanol production. We will 

produce somewhere in the neighborhood of 13 to 14 billion gallons 

this year. So, we are very close to reaching the cap. 

Senator BOXER. OK. Then, under the law, what happens to that 

subsidy at that point? 

Secretary VILSACK. What happens, I am sorry, what? 

Senator BOXER. To the subsidy. 

Secretary VILSACK. Well, that subsidy continues. Part of that 

subsidy is also encouraging cellulosic ethanol production and what 

we hope to be able to do with the pilot projects, with the biorefineries that we are going to provide resources to. We hope to be able 

to identify alternative feedstocks. 

Our goal here is to have a renewable fuel industry that is operating in all parts of the country. We have programs in the Northwest looking at woody biomass. We have programs in the Southwest looking at algae. We have programs in the Southeast looking 

at perennial grasses and landfill waste. I mean, there is a multitude of opportunities here. 

That is what is exciting about this future, that we can wean ourselves off an over-dependence on foreign oil. We can create jobs and 

a revitalized rural economy with this industry. This is a linchpin 

to really turn the situation around in rural America. 

Senator BOXER. Well, the thing that I like about cellulosic is that 

you do not destroy food product. 
35 

Secretary VILSACK. Well, so little of the corn, in a sense it is not 

that we are growing corn that folks eat. The corn is obviously fed 

to livestock. Most of what we grow is fed to livestock. It is not—— 

Senator BOXER. That is important. 

Secretary VILSACK. Well, it is important. But a lot of folks fail 

to realize the point that Senator Johanns made earlier, which is 

when ethanol is produced, it is not just ethanol that is produced. 

There are a number of co or byproducts that are produced, one of 

which is a distiller’s dried grain that is a feed supplement that is 

significant, so significant that it is now also not only feeding our 

livestock but also is a great export opportunity for us to bring additional wealth into the country. That creates more jobs. 

Senator BOXER. OK. My last question. So, when we reach this 15 

billion of corn ethanol, we will then shift our focus to these other 

kinds of cellulosic. Is that right? 

Secretary VILSACK. In a sense, we have shifted our focus in the 

sense that we are focusing our commitments and our time and our 

research on identifying feedstocks and alternatives so we can grow 

out this industry. 

Senator BOXER. But unless there is action taken, the corn subsidy would continue? 

Secretary VILSACK. Well, you have actually, I think, time limited 

it to this year. It expires at the end of this year. My hope is that 

you think not about creating a cliff but creating a glide path, phasing this out over a period of time, and, frankly, phasing out the tariff over a period of time, but utilizing those incentives to grow this 

industry, to make the supply more convenient with more blender 

pumps, to figure out ways in which we can—— 

Senator BOXER. What industry? 

Secretary VILSACK. The renewable fuel industry, which would include cellulosic, advanced biofuels and the like. 

Senator BOXER. OK, thank you. 

We are going to move to our next panel and I am going to call 

on Senator Whitehouse to lead the questions on that panel. Because we have to move along. 

We are going to call on our panel two, Hon. Gina McCarthy, Assistant Administrator for the Office of Air and Radiation, U.S. Environmental Protection Agency, and Dr. Henry Kelly, Acting Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. 

Department of Energy. 

Because of our press for time, we are going to see if you can do 

your statement in 4 minutes and then we will keep our questions 

to 4 minutes each. 

So, Hon. Gina McCarthy, welcome. It is nice to see you. 

STATEMEMT OF GINA MCCARTHY, ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY 

Ms. MCCARTHY. Thank you, Senator, it is nice to see you as well. 

Should I begin? 

Senator BOXER. Please. 

Ms. MCCARTHY. OK. Chairman Boxer, Ranking Member Inhofe, 

members of the committee, I appreciate the opportunity to testify. 

I will try to be very quick. 
36 

Biomass can play an important role in reducing our dependence 

on foreign oil, decreasing greenhouse gas emissions and improving 

our rural economies. 

A year ago, in compliance with the directives of the Energy Independence and Security Act, EPA finalized revisions to the national 

Renewable Fuels Standard Program, which we commonly call RFS. 

These provisions established new annual volume standards for 

renewable fuels, reaching a total of 36 billon gallons in 2022. This 

includes a total of 21 billion gallons of advanced fuels including 16 

billion gallons of cellulosic fuel, 4 billion gallons of other advanced 

biofuels, and a minimum of 1 billion gallons of biofuel-based diesel. 

The greater volumes of biofuels required by the RFS will displace 

about 13.6 billion gallons of petroleum-based gasoline and diesel, 

about 7 percent of expected annual gasoline and diesel consumption in 2022. 

EPA strongly supports expanded use of advanced biofuels, in particular, cellulosic biofuels. When Congress enacted EISA, it recognized that cellulosic targets were very aggressive. It included provisions directing EPA to reduce the mandated levels set in the statute if cellulosic ethanol production were lower than the statutory 

mandates. Simply put, Congress did not want us to require refiners 

to use more cellulosic ethanol than would be produced. 

Unfortunately, the cellulosic industry did not develop as quickly 

as Congress anticipated and we had to lower the cellulosic ethanol 

mandate. For 2010 and 2011, we set cellulosic standards at about 

6.5 million gallons, substantially below the EISA targets of 100 and 

250 million gallons for these years. 

Although EPA then had the discretion to reduce the total advanced and total renewable fuel standards, we did not do so because we fully expected sufficient volumes of other advanced 

biofuels would be available. 

We set these standards in a transparent rulemaking process. Before we even proposed the annual standard, we conducted a thorough review of the cellulosic industry, including one-on-one discussions with each of the producers. We worked with the Department 

of Agriculture. We worked with the Department of Energy and the 

Energy Information Administration in an open and transparent 

process. That is how the standards are set. 

We intend to propose a 2012 standard early this summer and to 

finalize them by the end of November 2011. 

The biofuel sector is a dynamic one. We frequently hear from 

companies who are developing using innovative, new production 

techniques or different types of feedstock. We recognize the importance of evaluating and qualifying such new biofuels and, where 

possible, to input them as quickly as we can into the RFS Program. 

Current advances in cellulosic biofuels approved for RFS include 

biodiesel and renewable diesel from certain feedstocks, ethanol 

from sugarcane, diesel and renewable diesel from algal oil, ethanol 

and diesel from approved cellulosic feedstocks, jet fuel and heating 

oil from certain feedstocks. 

We also have a process that has been put in place to evaluate 

new biofuels and it is exciting to see that last year we approved 

canola-based biodiesel and we have a number of new technologies 

in the queue that seem very promising. 
37 

So in closing, EPA is currently working successfully to implement the RFS Program, both by following the specific direction in 

the statute, as well as by working with the companies to understand what technologies are available and how we can get those 

into market to achieve the requirements under the statute. 

The program today contains several innovative elements that together provide incentives for the advanced and cellulosic biofuels 

sector, and we recognize that the current cellulosic production is 

not in line with the volumes established under EISA, but we will 

continue to closely monitor it and the progress of the sector, and 

set standards as the statute instructs. 

Thank you very much. 

[The prepared statement of Ms. McCarthy follows:] 
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Senator BOXER. Thank you, so much. 

Mr. Kelly, we welcome you. Acting Assistant Secretary for Energy Efficiency and Renewable Energy, Department of Energy. 

STATEMENT OF HENRY KELLY, ACTING ASSISTANT SECRETARY FOR ENERGY EFFICIENCY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF 

ENERGY 

Mr. KELLY. Thank you, Chairman Boxer, Ranking Member 

Inhofe and members of the committee. I am happy to be here to 

discuss the Department of Energy’s biofuels programs. 

The transportation sector accounts for about two-thirds of the 

U.S.’ oil consumption and contributes about one-third of the Nation’s greenhouses gases. After housing, transportation is the second biggest monthly expense for American families. As the President said in his recent speech, ‘‘In an economy that relies so heavily on oil, rising prices at the pump affect everybody.’’ 

But emphasizing that ‘‘there are no quick fixes,’’ the President 

outlined a series of actions which, taken together, could cut U.S. 

oil imports by one-third by 2025. These include programs that 

would increase the efficiency of vehicles as well as increase the use 

of new sources of fuel for the transportation sector. Home-grown 

biomass that can create jobs in the United States is clearly a part 

of the solution to this problem. 

My office in the Department of Energy, the Office of Energy Efficiency and Renewable Energy, works very closely with EPA, the 

Department of Agriculture and other Federal organizations to accelerate the use of biomass. We do two things. One, we try to put 

forward programs that will accelerate the use of current biomass 

technologies. Then we support research and development and demonstration on the next generation of biomass technology. 

We are making very rapid progress. Domestic biofuels production 

increased from less than 4 billion gallons a year in 2005 to nearly 

13 billion gallons a year today. But there is a lot more work to be 

done. 

We have worked closely with EPA to get the data needed to understand the potential impact of gasoline containing up to 15 percent ethanol by volume on compliance with the vehicle and emissions standards established under the Clean Air Act. Gasoline containing up to 10 percent ethanol by volume is allowed today. Using 

DOE and other test procedure test data, the EPA ultimately determined that E15 may be introduced into commerce for use in Model 

Year 2001 and newer vehicles once several other conditions are 

met. 

DOE is also working with auto manufacturers to assess the viability of making new vehicles compatible with the higher ethanol 

blends, and working to ensure that fuel pumps and underground 

fuel storage tanks are compatible with these fuels. 

But DOE is also making investments in the next generation of 

biofuel technology and this includes technologies that convert a variety of feedstocks, such as corn stover, wood waste and other cellulosic materials, into a variety of fuels. We are also exploring ways 

of converting corn and cellulose to cost-competitive, drop-in substitutes for gasoline, diesel and jet fuel. 
47 

Drop-in fuels would remove many of the barriers to commercial 

adoption of biomass fuels since they would be compatible with existing vehicles and delivery systems. There is substantial demand 

in the aviation industry for drop-in fuels and we are supporting the 

FAA and the commercial aviation sector in developing jet biofuels 

as participants in the Commercial Aviation Alternative Fuels Initiative. 

DOE is supporting two main pathways to produce these advanced fuels, thermo-chemical, based on pyrolysis and gasification, 

and biochemical, using enzymes, fermentation and other mechanisms. 

We are also working on cutting the costs of collecting, transporting and storing cellulosic materials. Algae may be a long-term 

strategy for biomass as well, and we are supporting programs in 

all of these areas using Recovery Act Funding. 

Many of the research projects are rapidly leading to technologies 

that can be deployed at a commercial scale and we have very ambitious goals, as has been discussed, for these advanced fuels. We 

have a target of 21 billion gallons a year from advanced biofuels. 

The President recently set a goal on breaking ground on at least 

four commercial scale cellulosic or advanced biorefineries over the 

next 2 years. The Navy has set a goal for renewable fuels to comprise 50 percent of its transportation fuels by 2020. 

Senator BOXER. OK, you are going to have to wrap it up in a sentence. 

Mr. KELLY. Yes. So, our 2012 budget request will buy you all of 

this. We think we have a good program in place and we are confident that we can meet our goals. 

[The prepared statement of Mr. Kelly follows:] 
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Senator BOXER. Thank you. 

Because I failed to call on him at the last panel, Senator 

Whitehouse, you start it off for us. 

Senator WHITEHOUSE. Thanks very much, Chairman. 

This is an exciting week for a Rhode Island company because on 

Friday in Shenandoah, Iowa, they will be opening a very significant 

bioprocess algae plant that is a, creates kind of a wonderful tableau. 

It begins with the corn in the field, then goes to the old fashioned 

barn in which the corn is put up, and then it goes to the modern 

steel ethanol producing facility, and then it will go to these towers, 

glowing green towers that the carbon effluent from the ethanol 

process will be bubbled through. They have done a very good job 

of figuring out how the algae can be kept separate and can be encouraged to feed aggressively off of the carbon that would otherwise 

be out polluting our atmosphere. Then of course the algae grown 

successfully off it can make lipids that make oil. Off you go. 

So, it is a big day for BioProcess Algae of Portsmouth, Rhode Island that has a lot of the technology behind this Iowa project. That 

happens all on Friday. 

In the light of that, I just wanted to get your thoughts on what 

you thought the obstacles were to further growth in the algae fuel 

area and how important a landmark you felt this was. 

Mr. KELLY. Well, we have supported a number of algae projects 

as part of our Recovery Act Funding and are optimistic that many 

of these projects are going to lead to cost-competitive fuels. 

Algae can do two things. It can produce the cellulosic, biomass 

feedstock itself, but it can also be used, as I believe is the case in 

the Rhode Island plant, as a conversion unit so that it converts 

sugars into lipids that can be converted directly into fuel. 

But we are trying to support a portfolio of ideas. The scientists 

have developed a number of different approaches, many of which 

are going to be, we hope, commercially competitive with today’s 

fuel prices in the next few years. 

Senator WHITEHOUSE. Good. Well, thank you very much. Friday, 

all eyes on Shenandoah. 

Mr. KELLY. Yes. Congratulations. 

Senator BOXER. All right. Very good. 

Senator Inhofe. 

Senator INHOFE. Well, every time we get into these discussions 

I always have to get on the record that if people are serious about 

lessening our dependence on foreign countries, the Middle East, it 

is very easy to do. All we have to do is exploit our own resources. 

As I think we have said many, many times, no one will argue with 

the fact that the CRS has reported that the United States has more 

of the reserves, recoverable reserves, in coal, gas and oil of any 

country. So all you have to is produce and exploit our own resources as every other country in the world does. But, having said 

that, let us talk about a couple of the things that are of interest. 

First of all, I would agree, and I think that the Chairman and 

I agree on this, that we are looking to the time when we have cellulosic ethanol. It is coming. It is exciting. I have been to a lot of 

places where they are using it. 
57 

It is my understanding that right now, to put this in context, 

only 6 million gallons of cellulosic non-corn ethanol were produced 

last year as opposed to 13 billion gallons of corn ethanol. Is that 

somewhat accurate? 

Mr. KELLY. Yes, I believe that is true. 

Senator INHOFE. Yes. That is just amazing. Less than 1 billion. 

Well, anyway, that being the case, when the Secretary of Agriculture testified, and we are talking about my bill. See, I still think 

that is the answer. You give people an option. He said, well, 80 

percent of the people in Iowa want to use corn ethanol. That is 

fine. If they have an opt out, they can use all, they can use all, they 

can use 100 percent corn ethanol. But also, in States where they 

do not believe that, they can use something else. That is the reason 

that I hope that people seriously consider that as an approach. 

Now, Mr. Kelly, can you discuss the impact of E10 and potentially higher level blends have on non-road, small and older vehicle 

engines and materials durability? Could you? 

Mr. KELLY. Well, we are, we have not done extensive testing. We 

have done a little testing. We have worked with EPA on the specific issue of what automobiles are compatible with E15 and the decision was made that, based on our testing, that 2001 and newer 

vehicles would not have any damage to the emission control system. 

Senator INHOFE. We are talking about the smaller engines now. 

I think you know that the marine manufacturers have this as their 

highest goal right now is to be able to offer a choice. Do you want 

to comment on that, Ms. McCarthy? 

Ms. MCCARTHY. The only thing I would add to what Mr. Kelly 

has said is to indicate to you that in our decision on E15, we tried 

to be very clear about where testing was adequate and where we 

had verified, scientifically credible data to indicate that E15 could 

be used. 

We did raise concerns. I am no just saying that data was not 

readily available on those smaller engines, but also raising concerns based on our engineering assessment that there could be potential problems with E15 usage in those engines and we did not 

approve that for use in those engines for that reason. 

Senator INHOFE. OK. Well, I want to, I would encourage you to 

continue with these studies so that people will be informed and can 

look back to the Environmental Protection Agency as their source. 

Now, we have talked about E10, we have talked about E15, they 

are even talking about E85. I know this is something that has been 

discussed up in Iowa. The EPA has done some studies on this. Ethanol at 67 percent of the BTU content in gasoline, according to the 

EPA, and I think I am accurate on this, tell me if I am not, and 

I am quoting now, operating on E85 usually experience a 20 to 30 

percent in miles per gallon due to ethanol’s lower energy content. 

These results were seconded by the Consumer Report study that 

found E85 resulted in a 27 percent drop in fuel efficiency. 

Is that accurate? 

Ms. MCCARTHY. I believe that is. We have done some studies on 

fuel efficiency related to E85. I think Mr. Kelly has worked with 

us on those issues from DOE’s perspective. There are tradeoffs 

here, and we balance those issues, and EPA is looking at, obvi-
58 

ously, at other venues to increase fuel efficiency in vehicles. Here, 

we are just looking at what the impact is of different fuel usage 

on air quality. Certainly E85 is an allowable use. It does not create 

a problem for the emission systems in these vehicles, and for that 

reason it is allowable. 

Senator INHOFE. [presiding.] Well, it is going to have to be a lot 

of makeup if you talking about 27 percent. Thank you. 

Madam Chairwoman has gone. Who is next? Senator Merkley? 

Did she give me the gavel? 

Let me announce here that when Senator Boxer left she gave me 

the gavel and I assume that is a permanent gift. 

[Laughter.] 

Senator INHOFE. Senator Merkley. 

Senator MERKLEY. Thank you very much, Mr. Chair. Do not let 

go of it. Hold tight. 

I wanted to followup a little bit on the corn ethanol front. In the 

past, it was often observed, or argued, that there was a ratio that 

was somewhere close to one to one in terms of the energy input and 

the output. I have seen recent reports and show that the industry 

has revolved and that has changed substantially and that perhaps 

the ratio of energy in, energy out is as high as 2.3 to 1. 

How do you all evaluate that change in the industry and the 

amount of energy consumed versus that produced? 

Mr. KELLY. Well, the fact is that the industry has gotten much 

more efficient over recent years. The one thing that has been quite 

controversial is that industry has to use mostly natural gas and 

other energy sources to produce this ethanol. So one of the most 

controversial issues has been whether corn ethanol reduces CO2

production. Recent studies have shown that it does reduce CO2 production in comparison with standard petroleum-base fuels. Not as 

much as cellulosic ethanol, certainly. 

Senator MERKLEY. So, must my specific question is, is the ratio 

of 2.3 units of energy out for one energy unit in a fair assessment 

of the technology? 

Mr. KELLY. I am going to have to get back to you on that. I do 

not have that number in my head right now. 

[The information follows:] 

The energy ratio of corn ethanol (energy in ethanol divided by the fossil energy 

used to produce the ethanol) has increased in recent years due to a reduction in fertilizer use per bushel of corn harvested in farms and energy use per gallon of ethanol produced in ethanol plants. According to the Greenhouse gases, Regulated 

Emissions, and energy use in Transportation (GREET) model developed by Argonne 

National Laboratories, the energy ratio in 2009 was 1.64 for corn ethanol; that is, 

for every Btu of fossil energy used to manufacture corn ethanol, 1.64 Btus of ethanol 

were produced. 

Other studies that use different methods of considering ethanol co-product (namely distillers’ grains and solubles [DGS], which is used for livestock feed) in their lifecycle analyses (LCAs) have yielded higher energy ratios for corn ethanol. GREET 

considers DGS using the displacement method (which accounts for the input energy 

requirement of the conventional feed product DGS displaces) while some other studies have used other methods such as process-based allocation of energy expenditure 

in ethanol plants (which allocate the energy and environmental burdens of ethanol 

plants between ethanol and DGS). A process-based allocation method, which yields 

somewhat higher energy ratios for corn ethanol, was used to calculate the energy 

ratio of 2.3. 

EPA and California use the displacement method in their examination of corn 

ethanol life-cycle energy and environmental effects, since that is the default co-product method in the GREET model. The GREET results are documented in a recent 
59 

journal article published in ‘‘Biomass and Bioenergy’’ (Vol 35, Issue 5, May 2011, 

pages 1885–1896). 

Senator MERKLEY. If you could, that would be helpful. One of the 

ethanol producers noted that their fuel has the lowest carbon intensity of any commercially available transportation fuel and 

lifecycle, looking at all the inputs and getting it to market. Does 

that fit, then, with the point that you were just making about carbon dioxide production, if you will, carbon dioxide footprint? 

Mr. KELLY. Well, clearly we want to go toward a fuel that has 

extremely low carbon dioxide output namely a cellulosic fuel input 

and a very, very efficient conversion technology. So, we are optimistic that we have technologies, possibly including the one that 

you are describing, that will achieve that goal very quickly. 

Senator MERKLEY. That is kind of a different answer than the 

question I was asking though, in terms of comparing it to our other 

generally available transportation fuels at this point, whether it is 

carbon, I recognize that we have over the horizon, and I will speak 

to one of those in just a moment, but in terms of the current options, is it fair to describe it as the lowest carbon footprint? 

Mr. KELLY. Well, I would say of the current options, if you can 

go directly from a cellulosic input to a fuel, that is probably the 

lowest CO2 per mile driven that you are going to get. If you can 

get electricity from a renewable source, an electrical vehicle would 

be comparable. But right now, that is not the average for electricity. 

Senator MERKLEY. Ms. McCarthy. 

Ms. MCCARTHY. The only thing I was going to add, Senator, is 

that what we are finding is that the refineries themselves are getting more and more efficient which is part of, I think, the answer 

to the question. It is also very exciting that we right now have a 

petition to qualify ethanol from algae. So, there are some really exciting ways in which you cannot only make the plants more efficient, and they are getting more efficient in terms of their CO2 output, but looking at the upstream and full life cycle analysis as well. 

Senator MERKLEY. Thank you. I certainly wanted to note that 

ZeaChem in Oregon expects to start limited production this fall 

and that is a straight from popular tree cellulosic process, with a 

chain of products that I believe involves vinegar, paint thinner and 

then ethanol. They can interrupt it to sell at the right point. But 

it has a dramatically substantial high ratio for energy in and energy out and very low carbon footprint. 

Senator BOXER. [presiding.] Thank you. 

Senator Johanns. 

Senator JOHANNS. Thank you, Madam Chair. Thank you for 

being here. 

Senator Inhofe asked you about the efficiency of ethanol versus 

gasoline and studies do indicate that there just simply is less gas 

mileage if you are burning ethanol versus burning gasoline. 

But that tradeoff exists with any energy source. I mean, you can 

power an 18 wheeler today on electricity. You probably are not 

going to power an 18 wheeler on natural gas. Diesel operates differently than unleaded gasoline. Would that not be the case across 

the entire energy specter? 
60 

Mr. KELLY. Well, you have to be a little careful about how you 

state fuel efficiency. We try to use miles per gallon with gasoline 

equivalent to make sure that we are comparing the energy content 

of different fuels consistently. Because alcohol has about 60 percent 

of the energy density of gasoline. So that is just inherent in the 

product. 

Now, there are ways of converting the corn with new technologies to other fuels that have a much higher energy density and 

we are working on those and are optimistic about them. For diesel 

and for aircraft, the Defense Department needs something with 

high energy density and a number of these products that we are 

developing right now and that should be available in a few years 

will be able to be direct drop-in replacements. 

Senator JOHANNS. Which kind of leads me to the next observation or question that I wanted to ask, and that is that I happened 

to be on the Cabinet when the RFS was being discussed and there 

was a lot of debate at what level and a lot of effort to try to understand the science and the development and glimpse into the future. 

But I think at the end of the day, really what Congress was attempting to do was to send a stable signal to the marketplace that 

investment in the research, the development, existing plants for 

corn-based ethanol, was going to be supported, much like we support many industries, the oil industry, etcetera. Would you agree 

with that assessment? 

Mr. KELLY. Well, obviously I cannot speak for the intent of Congress. But certainly the result has been to create a stable market 

for this new technology and we hope that we will find a way to create a stable market for the next generation of technologies that follow. 

Senator JOHANNS. What happens if the rug is just pulled out and 

all of a sudden it ends tomorrow, no blenders’ credit, somebody is 

successful in altering the tariff, somebody is successful in changing 

the RFS. What happens to the industry, in your judgment? 

Mr. KELLY. Well, we certainly want to be careful in how we make 

this adjustment. The President has said that he wants to work 

with Congress on ways of making the subsidies adapt to the current technical situation while still respecting the taxpayers. 

So, we look forward to working with you to make sure that we 

transition to support this next generation of technology without a 

major disruption. 

Senator JOHANNS. Ms. McCarthy, I did not mean to ignore you. 

I am sorry. Is there anything in that, I have about 30 seconds left, 

is there anything that you wanted to offer in any of those questions? 

Ms. MCCARTHY. No, Senator. The only thing I would add is that 

this is a very young program and the exciting thing is the number 

of new feedstocks that we are looking at right now. All I can tell 

you is that those are, those are small, growing companies that are 

really looking for investors and want the stability to know that we 

can make the decisions about their feedstocks quickly and they will 

have an ability to get up and running. 

So, from my perspective, what they tell us is that this program 

is very important for their business and the innovation that they 

are trying to grow in our economy. 
61 

Senator JOHANNS. Thank you, Madam Chair. 

Senator BOXER. Senator Udall. 

Senator UDALL. Thank you, Madam Chair. 

First, I would like to thank the Department of Energy and the 

Department of Agriculture for the combined support of over $100 

million in grants and loans for the first integrated algae biorefinery 

to be constructed by Sapphire Energy in Luna County, New Mexico. We are very proud of that. 

On the topic of algae, testimony from the second panel, from the 

Advanced Biofuels Association and DuPont, discuss how our biofuel 

policies, both tax incentives and Renewable Fuels Standard, treat 

different feedstocks differently. They indicated a technology neutral 

approach would be both fair and more successful. 

Do you support efforts to level the playing field so that advanced 

biofuels qualify for the same tax incentives and treatment under 

the Renewable Fuels Standard regardless of feedstock? 

Mr. KELLY. Well, as I said earlier, we are committed to finding 

ways of updating the incentive system now in place to include the 

variety of different products and the variety of different feedstocks 

and the variety of different fuels we can produce. We would be 

happy to work you on that. 

Senator UDALL. Ms. Assistant Administrator McCarthy, can you 

answer that? 

Ms. MCCARTHY. Senator, all I will tell you is that at this point 

in time we have a program up and running. We are able to look 

at these feedstocks. We will do whatever Congress asks us to do 

in terms of looking at different standards that they believe will 

move the most and the best products into the market as quickly 

as possible. 

Senator UDALL. I hope that you both have the benefit of hearing 

the next panel and their testimony and their advocacy on that particular issue. 

Assistant Administrator McCarthy, one just off-topic question. 

We have an air quality issue in New Mexico on the San Juan Generating Station. Apparently Region 6 EPA in Dallas is operating 

under a deadline to issue a Federal implement plan very soon. 

The State of New Mexico’s Environment Department sent a letter back in March asking for a 90-day extension so that they can 

finalize an alternative State implementation plan. I hope, I am not 

aware that EPA Region 6 has answered that letter, so I was hoping 

that you would keep us in the loop. I do not know if you know that 

right now off the top of your head. 

Ms. MCCARTHY. Senator, I am familiar with that issue. I met 

with the folks from New Mexico and we had the Region plugged 

in on the phone. I probably met 2 weeks ago with them. I think 

that New Mexico is absolutely on the right track. They are really 

interested in doing their own plan. We are always interested in deferring to them. I will make sure that they have the correct signals 

if they did not when we met. 

I do not know whether we actually need to go to a formal extension because they can do that at any time. But I will make sure 

that I keep abreast of that and we give them every opportunity. 
62 

Senator UDALL. Great. Thank you very much. I am sorry that I 

am going to miss some of the other testimony here. I have several 

other commitments. I appreciate your being here today. Thank you. 

Senator BOXER. Thank you. 

Senator Boozman. 

Senator BOOZMAN. Thank you, Madam Chair. 

Dr. Kelly, as you know, the Energy and Independent Security 

Act contains a Renewable Fuels Standard that severely limits the 

ability for wood biomass to participate. The current definition limits biomass utilization to just 10 percent of America’s forest. This 

is a problem for Arkansas as well as many other States which are 

rich in biomass. 

In the past, Secretary Vilsack has noted that the definition from 

the 2008 Farm bill, to quote, is a common sense and practical approach that enables market participation while simultaneously considering the sustainability of our lands. 

I hope that the Administration will express support for the biomass definition used in the 2008 Farm bill. Can you all comment 

as to where you are at on that? 

Mr. KELLY. I am afraid that I am not familiar with the Farm bill. 

I would defer to my colleagues. 

But what I can say is that we have very aggressive programs to 

convert wood into useful fuels and the ultimate goal here is to have 

something that is fully competitive on a price basis with gasoline, 

and of course the mark keeps changing. 

But we are very optimistic that there are ways of taking forest 

waste products and other intentionally grown crops and converting 

it into diesel jet fuel and other materials that are fully competitive. 

That is the real home run. 

We think the market will make these decisions because these 

will be simply the best fuels available and we are convinced we will 

get there certainly within this decade. 

But we will certainly talk to our colleagues about that provision. 

Senator BOOZMAN. OK. That would be very helpful. The other 

thing is, does it make any sense to have the subsidized American 

ethanol that is ultimately exported? How does that accomplish the 

goals that we are intending? Is that a wise use of taxpayer money? 

Mr. KELLY. Well, as we said, these subsidies undoubtedly do 

need to be revisited. There has been a lot that has changed since 

the program was put in place. I think the producers themselves 

recognize that and we are working with them and would be happy 

to work with you on the appropriate revisions. 

Senator BOOZMAN. So, do you think that is something that needs 

to be revisited? 

Mr. KELLY. We think that, yes, the current system plainly needs 

to be revisited. The goal is to create jobs here in the United States 

as well as find energy supports for imported petroleum. We need 

to honor both of those objectives in whatever new program—— 

Senator BOOZMAN. So, do you agree that that really does not 

make a lot of sense? 

Mr. KELLY. Well, we do try to help exporters in other areas, creating jobs here in the United States. So, I would like to discuss 

that with you at greater length. But the goal of job creation, particularly job creation in rural area, is the part of the program that 
63 

we should maintain. One of the things that we are hoping to do is 

increase U.S. exports. 

Senator BOOZMAN. But that could be true of any industry. If you 

heavily subsidize any industry, you are going to increase the exports. 

Mr. KELLY. I am not arguing that we should not revise it. 

Senator BOOZMAN. That, to me, just makes no sense because the 

program was not set up on that basis. I mean, that does not help 

our energy independence at all. If we are creating an export program, then I would argue that we need to get other industries in 

line that could vie for the same dollars. We have all kinds of industries that are desperately in need of help for their survival. 

Mr. KELLY. Oh, I completely agree. We are anxious to take all 

of these considerations into account if we are trying to create the 

right incentives. 

Senator BOOZMAN. Thank you, Madam Chair. Thank you for 

being here. I have enjoyed the testimony. 

Senator BOXER. Senator, I thought that was an interesting line 

of questioning because I remember once I had an amendment that 

would have stopped certain subsidies for Big Oil that was exploiting from Alaska. But it lost by a hair. But maybe we can team up. 

Because I agree with you. 

Senator INHOFE. We need to talk before the team sets up. 

[Laughter.] 

Senator BOXER. OK, moving right along. 

Senator BOOZMAN. I will team up with you and Senator Inhofe. 

Senator BOXER. Oh, yes, you will protect yourself that way for 

sure. 

[Laughter.] 

Senator BOXER. Dr. Kelly, in your testimony you talked about 18 

research and development demonstration projects for innovative 

biorefineries. Could you just give us in my remaining time, very 

briefly here, one or two of those that are real, live? 

Mr. KELLY. Well, we are able to support something like 29 different pilot projects and commercial projects because of Recovery 

Act Funding. A number of those are reaching a commercial scale, 

they are fully ready to go forward. One of them is called BOET. 

They are all converting various kinds of feedstocks—— 

Senator BOXER. Would you describe that one that you just mentioned? POET, did you say? 

Mr. KELLY. I am afraid I am going to have to get help on that 

one. 

BOET is what feed? But what is the input? 

Senator BOXER. The input? 

Mr. KELLY. It is corn stover to ethanol. It is in Iowa. 

Senator BOXER. What is stover? 

Mr. KELLY. Corn stover is what is left over when you take the 

seed out. So, the good thing is, it is available with no additional 

inputs. It has already been produced. So, you do not have to put 

additional water—— 

Senator BOXER. Very interesting. Well, that is good. 

Mr. KELLY. The reason I am confused is that there are so many 

different permutations and combinations that have been—— 
64 

Senator BOXER. I know. I have seen a lot of these projects in my 

home State. It is very exciting. I mean, the potential here is just 

enormous and it is, as I think Hon. Gina McCarthy said, that it 

is slower than we would like. But it is just there, and you just 

know we are going to have a breakthrough and it is going to 

change our world. That is important. 

Well, I want to thank both of you very much and call up our last 

panel. Michael McAdams, president of Advanced Biofuels Association, Jan Koninckx, global business director for Biofuels, DuPont, 

Kris Kiser, executive vice president, Outdoor Power Equipment Institute, Scott Faber, vice president, Federal Affairs, Grocery Manufacturing Association, and Mr. Brooke Coleman, executive director, 

Advanced Ethanol Council. 

We welcome all of you. We also thank you for your patience. We 

are happy to start with you, Mr. McAdams, president of Advanced 

Biofuels Association. 

Mr. MCADAMS. Madam Chairman, could I ask permission to have 

my full—— 

Senator BOXER. All of your statements will be placed in the 

record. If you could summarize them for us. 

Mr. MCADAMS. I have a new statement. I made some changes 

and I wanted to have the new statement—— 

Senator BOXER. Absolutely, yes. 

Mr. MCADAMS. Thank you, Madam Chairman. 

STATEMENT OF MICHAEL J. MCADAMS, PRESIDENT, 

ADVANCED BIOFUELS ASSOCIATION 

Mr. MCADAMS. Madam Chairman, Ranking Minority Member 

Inhofe, members of the committee, I am honored to be here this 

morning to speak on behalf of the Advanced Biofuels Association, 

a collection of 31 of our Nation and world’s top advanced biofuels 

and bioproducts companies. 

Two years ago, the ABFA appeared before this very committee 

to discuss the opportunities for advanced and cellulosic biofuels. 

Since that time, advanced and cellulosic biofuels have seen some 

positive developments and some disappointments. 

On the positive side, I am delighted to report to you that as a 

result of your work on EISA, we now have several new plants operating both in the United States and around the world which are 

producing advanced drop-in biofuels. These plants are making renewable fuels for the first time that can be used without changes 

to the transportation fleet or requiring any infrastructure changes 

to deliver them. 

For example, Tyson Foods, in combination with Syntroleum of 

Oklahoma, is currently producing 75 million gallons in Louisiana 

of a jet fuel from animal fats and food greases. These fuels, which 

are being produced as we speak, are identical to those produced in 

refineries across America from traditional barrels of oil. The initial 

sales of this plant have been to the U.S. Air Force and major U.S. 

oil refineries. 

As a result of its recent successful Initial Public Offering, Gevo 

has begun its plans to retrofit a traditional corn ethanol plant to 

produce 18 million gallons of isobutanol in June of next year. Additionally, they have announced plans to develop over 350 million 
65 

gallons of isobutanol production by 2015. If successful, this could 

ease some of the pressure with existing blend wall restrictions. 

These developments would simply not be occurring if it were not 

for the vision of this committee and the Congress from 2005 to date 

to enact the Renewable Fuels Standard. 

I urge you to reject the naysayers on advanced biofuels. They are 

simply not telling you the truth. The fuels are real, some are here 

today, and many more are on the way. 

Our Association and member companies strongly believe the current RFS is the most important Federal policy in supporting for the 

development of the biofuels industry in this country. We would specifically urge this committee, and Congress, not to tinker with the 

statute at this time. Since the rules were only final last July, we 

strongly urge the Congress to allow the markets and the players 

in the market to work within the current framework and see how 

much progress we can make toward reaching the overarching goals 

of the original legislation in the short term. 

As far as the specifics of the RFS, we want to compliment the 

EPA on bringing forward the energy density and equivalency provisions from the original RFS I program. In addition, we support the 

manner in which EPA has allowed the advanced biofuels mandates 

to continue as mandated despite shortfalls in some categories. 

One concern we would call to the attention of the committee 

today is the overall intent of Congress to back out foreign oil with 

as wide a range of products as possible. This is why you expanded 

the statute, to include other product lines, not just gasoline. 

Currently, the EPA, in their RIN certification process, is showing 

a tendency to be very prescriptive and narrow in allowing some of 

the determinations for new qualified pathways as well as qualifying some significant potential feedstocks. We would urge the Congress to stay closely engaged with the agency on these determinations. Many are moving forward at this time and could have a significant chilling effect if the existing commercial delivery chains 

are not approved. 

We should take full advantage of the ability to back out all the 

various components of the market. As most of you are aware, the 

chief challenge of the advanced biofuels and cellulosic industry has 

been to achieve necessary funding to build new generation facilities. The primary reason has been the Tax Code and its lack of consistency, parity and applicability for those in a manner those companies could use it. 

I thank you for the opportunity to be here with you today and 

I will look forward to your questions. 

[The prepared statement of Mr. McAdams follows:] 
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Senator BOXER. Thank you so much. 

Mr. Jan Koninckx, global business director for Biofuels, DuPont. 

STATEMENT OF JAN KONINCKX, GLOBAL BUSINESS DIRECTOR, BIOFUELS, DUPONT APPLIED BIOSCIENCES, E.I. DUPONT DE NEMOURS AND COMPANY, INC. 

Mr. KONINCKX. Good morning Chairman Boxer, Ranking Member 

Inhofe and members of the committee. 

I am Global Business Director for Biofuels at DuPont. In my testimony, I will provide our views on the future of biofuels and the 

role of the Renewable Fuels Standard in that future. 

I have two key messages for you. First, advanced biofuels are a 

technological reality. They will soon be a commercial reality. Second, the single most important thing that Congress can do for advanced biofuels is to provide a stable policy environment. Keep the 

RFS and advanced biofuels tax policies as they are. We simply ask 

that you do no harm. With a stable policy and access to the fuel 

pool, we will succeed. 

DuPont brings a uniquely broad perspective to bear on biofuels 

issues. Our seed business, Pioneer Hi-Bred, has enabled steadily 

rising production per acre for over 80 years. We have 208 years of 

demonstrated commercialization success of technical innovation 

and manufacturing expertise. We bring significant biotechnology, 

process engineering, plant operations and agricultural to bear to 

this endeavor. 

When the U.S. Government called on the private sector to step 

forward in advanced biofuels technologies and production, we responded with 10 years of work, hundreds of millions of R&D dollars and investment dollars, and our brightest minds. We are confident of our capabilities to cost-effectively produce advanced 

biofuels. 

What have we done? What are we working on? First, with our 

partner, BP, we have developed and demonstrated biobutanol, a 

higher alcohol with excellent fuel properties. We are on track to 

commercialize this in the United States by 2013. This drop-in fuel 

is the first biofuel specifically developed for its fuel performance 

characteristics in that it behaves very similarly to gasoline. 

Second, our other biofuel joint venture, DuPont Danisco Cellulosic Ethanol, will shortly announce the construction of a commercial-scale cellulosic ethanol facility based on corn stover, with 

production, again, in the 2013 timeframe. We are currently demonstrating this technology on corn stover and on the energy crop 

switchgrass, providing the opportunity to produce biofuels both inside and well outside of the Midwest. 

We recognize a variety of ramifications of our dependence on oil. 

They are becoming more acute. Biofuels are making solid progress 

in that problem. Biofuels’ production in the United States offsets 

about 10 billion gallons of petroleum each year, 10 billion of very 

expensive gallons that we do not have to import. That alternative 

fuel supply has been built by the first generation corn grain ethanol industry. 

The RFS has helped now to move the biofuels market in the direction of multiple feedstocks and production technologies as well 

as desirable fuel attributes. There are multiple technology devel-
77 

opers preparing to produce cellulosic ethanol, biobutanol and other 

drop-in fuels in demonstration or commercial quantities over the 

next 24 months. The economics and carbon performance of grain 

ethanol continues to improve, agriculture productivity is strong, remains strong, and will grow. 

These trends suggest that while the RFS targets are aggressive, 

as they should be, they are not out of reach. Advanced biofuels are 

delayed versus the annual RFS targets, but we are confident that 

they are on track to meet the overall goals. EPA has all the authority it needs to adjust annual targets on the way to meeting the 

overall goal. 

The RFS does not need to, nor should it be, reopened. In fact, reopening the RFS would seriously undermine the market predictability that is allowing us to move forward with significant investments in these businesses. 

I thank you for the opportunity to speak with you today on this 

important topic. I have tried to illustrate in my remarks biofuels 

technologies are demonstrated and implementable. We are poised 

to see commercial-scale production from multiple companies producing various fuels just as it should in a competitive market. We 

are confident that several of these technologies will prove out at 

commercial scale. 

Congress has done an effective job of creating a policy framework 

that has allowed this to happen, especially the RFS. Your job now 

is simply to maintain that policy so that we have the predictability 

to move forward. 

Thank you. I look forward to your questions. 

[The prepared statement of Mr. Koninckx follows:] 
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Senator BOXER. Thank you very much. 

Mr. Kiser, executive vice president, Outdoor Power Equipment 

Institute. 

STATEMENT OF KRIS KISER, EXECUTIVE VICE PRESIDENT, 

THE OUTDOOR POWER EQUIPMENT INSTITUTE 

Mr. KISER. Thank you, Chairman Boxer and members. 

Our 80 member companies make small engines and put them on 

vehicles and products. These are working machines. Typically, 

when one of our machines operates, someone is doing a job. 

We have some 200 million units in use today throughout the 

United States. Their uses are too numerous to mention. We have 

900 engine families that are regulated by the EPA and California 

Air Resources Board for emissions. A transition to any new fuel 

presents a challenge to us. 

Our members understand and appreciate the work Congress has 

done on reducing our dependence on foreign oil and energy dependence in the use of biofuels. We support that. 

Our members make a wide range of product, diesel electric hybrids, propane, compressed natural gas, battery, electric, etcetera. 

Moving to a different gasoline-based fuel presents an enormous 

challenge for our industry. None of our product, none of engines, 

none of our product, no marine product, no ATV, not snowmobile, 

etcetera is designed, built or warranted to run on any gasoline fuel 

containing more than 10 percent ethanol. 

The EPA did not make a sub sim declaration on E–15. They did 

not approve its use for any of our products. A sub sim declaration 

is a substantially similar. What they are saying is, this is a different fuel. 

We are not anti-ethanol. Our members can design a product to 

run on anything. We can design a product to run on E–10, E–20, 

E–30. It does not matter. The products we have designed and built 

and put into the marketplace were not designed for E–15. 

EPA has approved E–15 for use in model 2001 and newer automobiles. Again, it has not approved it for our use. But they are 

going to move that fuel into the marketplace. How are you going 

to put it into the marketplace? For 50 years you have been able to 

drive to a gasoline station and what goes in the car goes in the can. 

What goes in the can goes in the bass boat, lawn mower, ATV, 

snow machine, et cetera. You are changing that paradigm. 

It is especially true for seasonal uses. When you add alcohol to 

a petroleum-based product, you change the fuel. You destabilize the 

fuel. So, if a product is seasonal use, like a boat, landscapers’ 

equipment, consumers need to know about its storage, that storage 

capabilities have changed. The marine environment is particularly 

challenged. Ethanol absorbs water. Once it absorbs enough water, 

it phase separates and the product fails. 

The EPA has said they are going to put a label on E–15 at the 

pump, at retail. This is to educate the consumers about its use, 

what to put it in, not to put it in. We are concerned that a label 

is inadequate to provide this knowledge to the user. 

DOE did test our equipment. We have 900 engine families regulated. They tested 28 engines in four families. We do not disagree 

with their findings. What they found was it gives you increased 
87 

heat, performance irregularities, failure and unintentional clutch 

engagement. Unintentional clutch engagement is a fancy word for 

saying the blades engage when the machines are in neutral. This 

is a problem. Failure is a problem. 

Again, we are not opposed to ethanol. But what we are opposed 

to is bringing this fuel to the marketplace in a way that does not 

put our users’ economic interests or safety at risk. We would encourage those in the ethanol industry to work cooperatively to find 

a way to bring this fuel to the marketplace that does not place people at risk. 

Secretary Vilsack talked about blender pumps into the marketplace. That allows you, or any user, to choose your level of ethanol. 

It may be cheaper. It is less energy dense. You might be 

incentivized to purchase E–30 for all of your products. You might 

legally fuel your flex fuel product but illegally fuel everything else. 

Ethanol damage is permanent. It is irreversible. If you are a 

landscape operator and you destroy all of your equipment, you have 

hurt your business. 

We want to work with Congress and believe the partial waiver 

is a challenge where they have approved it for a subset of the auto 

fleet. All engine makers, autos, and ourselves, and the marine industry and others are challenging that in court. 

As that works it way through the system, we would like to work 

with Congress in finding meaningful alternatives to bring biofuels 

to market. 

Thank you. 

[The prepared statement of Mr. Kiser follows:] 
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Senator BOXER. Thank you very much. Other than that, you love 

it, right? 

[Laughter.] 

Senator BOXER. Mr. Scott Faber, and let me say, vice president, 

Federal Affairs, Grocery Manufacturers Association. Welcome. 

STATEMENT OF SCOTT FABER, VICE PRESIDENT OF FEDERAL 

AFFAIRS, GROCERY MANUFACTURERS ASSOCIATION 

Mr. FABER. Thank you, Madam Chair. 

My name again is Scott Faber. The Grocery Manufacturers Association represents more than 300 food, beverage and consumer 

product companies. We directly employ 1.7 million Americans in 

more than 30,000 communities, many rural communities. 

When I appeared before this committee in July 2008, tightening 

supplies of basic commodities and rising and volatile food prices 

was contributing to unrest in more than 30 countries and food inflation at home. 

Unfortunately, tightening supplies of basic commodities are once 

again contributing to high food prices. Overall, food at home prices 

are expected to increase by 3.5 to 4.5 percent in 2011 with even 

higher prices expected for basic staples like milk, meat and eggs. 

The same factors that caused a perfect storm in 2008 are once 

again contributing to rising food and food ingredient prices including strong global demand, poor weather, rising energy costs, commodities speculation and trade restrictions. But one very significant difference between 2008 and 2011 is that even more of our 

food, and primarily feed, is being diverted to produce fuel. 

In 2008, one-quarter of our corn crop was diverted from food and 

feed to fuel. Today, nearly 40 percent of U.S. corn production is diverted from feed and fuel to produce more than 13 billion gallons 

of corn ethanol. During the same period, corn yields increased by 

less than 6 percent and as a result, corn stocks are at or near 

record lows, contributing to high prices and extreme volatility. 

Unfortunately, rather than allowing the market to ration these 

tightening supplies, our mandates and subsidies continue to automatically divert more and more food and feed to our fuel supplies 

and trade barriers continue to limit the importation of less costly 

fuel alternatives. 

As we heard from Secretary Vilsack this morning, the price of 

food, especially the price of meat, poultry, dairy and eggs, is closely 

linked to the price of feed and food ingredients. On average, in particular feed costs, represent about 70 percent of the cost of producing meat and poultry and a smaller but significant share of 

processed foods. 

While food manufacturers are reluctant to pass these costs of 

production on to consumers, higher commodity prices often result 

in higher retail food prices, especially for basic staples. Many experts have confirmed the link between our food-to-fuel policies and 

higher food prices. 

The CBO, in fact, reported in 2009 that corn ethanol production 

contributed 10 to 15 percent of the increase in food prices that we 

saw between April 2007 and 2008. 

So, let me just take a minute to provide some recommendations. 
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We believe now is the time to revisit and reform these policies 

to accelerate the development of advanced biofuels and to freeze 

the amount of food and feed that is being diverted to our fuel supplies. In particularly, we urge Congress to freeze the amount of 

corn ethanol that must be blended into gasoline in order to provide 

advanced biofuels more time to reach commercial scale, to permit 

changes to engines unable to safely operate with higher ethanol 

blends, to complete assessments of the impacts of higher blends on 

engines and on the environment, and to allow corn yields to catch 

up with the artificial demand that has been created by the RFS. 

Congress should also immediately end the Volumetric Ethanol 

Excise Tax Credit, or VEETC, and instead invest in advanced 

biofuels. Immediately ending the VEETC would save taxpayers 

$4.8 billion and would have virtually no impact on corn ethanol 

production. Economists at CBO, GAO and leading universities have 

concluded that the VEETC is a costly redundancy to the corn ethanol mandate. 

Congress should also reject proposals to redirect the VEETC to 

corn ethanol infrastructure until advanced fuels reach commercial 

scale, investments and policies designed to bring higher ethanol 

blends to the marketplace will divert even more of the U.S. corn 

crop to our fuel supply. 

So, let me conclude by saying that we strongly support policies 

that will help bring advanced biofuels to the marketplace. 

Thank you. 

[The prepared statement of Mr. Faber follows:] 
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Senator BOXER. Thank you so much. 

Well, this has been really interesting so far. 

Last, but not least, Mr. Brooke Coleman, Executive Director, Advanced Ethanol Council. 

Before we begin, because of an 11:30 issue I have, I am going to 

turn the gavel over to Senator Whitehouse. 

Senator WHITEHOUSE. Oh, come on. 

Senator BOXER. I know. 

[Laughter.] 

Senator BOXER. We almost had a deal here, but Senator Inhofe 

said he could not promise me that he would not overturn any laws 

dealing with climate change. So, I had to call on my pal over here. 

[Laughter.] 

Senator BOXER. Just kidding. 

So, Mr. Brooke Coleman, if you could conclude. 

STATEMENT OF BROOKE COLEMAN, EXECUTIVE DIRECTOR, 

ADVANCED ETHANOL COUNCIL 

Mr. COLEMAN. Chairman Boxer, thank you. Ranking Member 

Inhofe, members of the committee, I appreciate the opportunity to 

speak here today. 

My name is Brooke Coleman. I am the executive director of the 

Advanced Ethanol Council. The Advanced Ethanol Council represents worldwide leaders in the effort to develop and commercialize the next generation of ethanol fuels ranging from cellulosic 

ethanol fuels from switchgrass, agriculture waste, and wood chips 

to advanced ethanol fuels from energy crops, municipal solid waste 

and algae. 

I want to start quickly with the big picture. When people talk 

about biofuels, and particularly ethanol, there is this spatial amnesia that seems to kick in and we focus solely on what is wrong with 

what we have today and not so much on where we have come from 

and where we are headed. I want to pull the lens back a little bit. 

We talked a little bit this morning with Secretary Vilsack about 

the benefits of the ethanol industry in rural America and he talked 

about the job creation, etcetera. What we did not talk about was 

the baseline. The baseline was, people seem to think that $1.80 per 

bushel of corn was good for farmers, good for the American taxpayer, that there was this nice balance between supply and demand. 

The reality was that grains were overproduced, farmers were 

going belly up, and the taxpayer was footing that bill and paying 

for that bill. So, when we think about, well, I am just opposed to 

this corn ethanol stuff, I think we have to keep that in perspective. 

The other thing is that they built 200 biorefineries at a time 

when we were exporting jobs and capital at an alarming rate to 

China and India. Two hundred biorefineries. 

The third thing, and this is what is most important to our industry, is they are proving out the effectiveness of the ethanol chemical in the marketplace. That is tremendous if you are trying to 

produce it from a different set of feedstock because investors, that 

reduces risk and investors know that that chemical works. 

The second big lens issue is foreign oil dependence and, whether 

you like corn ethanol or not, they are displacing a lot of foreign oil. 
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Last year, the U.S. ethanol industry alone displaced more oil than 

we import from Saudi Arabia every single year. So, I think the second charge for the renewable fuels industry with the Energy Independence and Act was to reduce foreign oil. 

But that brings, and there is a critical reason, of course. People 

talk about the dangers of foreign oil all the time and I would like 

to just focus on one issue. In 2008, Scott mentioned that prices 

went up. During that period, American taxpayers transferred almost $1 trillion to OPEC in wealth. So, when we hear in the advanced biofuels industry, and that was over 6 months, so when we 

hear we cannot get $1.5 billion, $2 billion in loan guaranty money, 

what we cannot afford is the status quo. 

Moving on to the third and most important issue, and that is the 

advanced biofuels industry. I stand united with my colleagues 

when I say that we have been asked to innovate, we have been 

asked to put a lot of the gallons in the marketplace, and we have 

stepped up. We have about 50 projects nationally in various stages 

of development. We have attracted in the vicinity of $1.5 billion in 

private sector investment. 

I want to make clear as well that we have a proven technology. 

So, step one is proving that you can produce the fuel. Step two is 

showing that you can produce the fuel at the ranges of fuel today, 

so $2.60, $2.70 a gallon. Our companies have shown that. I am 

sure a lot of Mike’s companies have shown that. The next step of 

course is commercialization. 

So why do we need this policy? Here is the most important part. 

The marketplace is not competitive. It is monolithic. Our cars are 

not FFVs like they are in Brazil. There is no choice at the pump. 

The incumbent oil companies, who had subsidies for 100 years, continue to get subsidies. The blend wall, which people talk about as 

a corn ethanol problem, is really a problem for us because our investors are looking out 5 years and seeing questionable demand. 

That creates a reverse domino effect where they are looking and 

they are saying, the risk is too high, we are not going to invest. 

And, of course, that exacerbates plant finance problems. 

So what are we going to do about it? The most important thing, 

bar none, is no backsliding. We have to keep the RFS. Even the 

perception that it might be overturned is bad for advanced ethanol. 

The second is we have to open up the marketplace. We need the 

opportunity to compete. Everybody wants to see a free marketplace, 

but it is not as easy as showing up with a cost-competitive, cheaper 

fuel in this marketplace when it is this vertically integrated. 

Third, and this is very, very important as well, we need a tax 

policy that reflects 2011 and the commitment that Congress has 

made in the RFS instead of tax policy that is oriented 100 years 

ago when it was very important at that time to produce more oil 

and to mitigate the risk of drilling in case there was nothing found. 

So we really have to have the tax policy catch up with the RFS to 

get this done. 

So we stand ready to produce these gallons and what we need 

more than anything else is certainty over time. 

Thank you very much. 

[The prepared statement of Mr. Coleman follows:] 
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Senator WHITEHOUSE. [presiding.] Thank you very much. 

This has been a very helpful and instructive panel. Because we 

are coming up on this April 15th moment in Shenandoah, IA where 

we are doing the expansion of the plant to grow algae off of the exhaust of the ethanol plant, I am interested in asking each of you 

what role you see algae biofuels as playing in the advanced biofuel 

mix. 

Why don’t I start with you, Mr. McAdams? 

Mr. MCADAMS. It is a very important role. I would, I want to 

point out to the committee there are various, different ways in 

which algae can be used to make a biofuel. There are some that 

not so elegantly describe it as the squish, which is where you grow 

as efficiently as you can a lipid with high concentrations of oil, and 

then you remove the oil and then put it through a secondary process to make a traditional drop-in fuel. There are other 

heterotrophic algae processes which do not use sunlight or CO2, but 

use it as a mechanism in a fermentation process. 

We represent both types. We have Sapphire, who is going to deploy in New Mexico, and we have Solazyme, who has just gone out 

with their IPO. So, these are very promising technologies and they 

certainly have a place in backing out foreign oil in the future. 

Senator WHITEHOUSE. Thank you. 

Mr. Koninckx. 

Mr. KONINCKX. We do some work in algae. We focus on cellulosic 

ethanol and on butanol because the cellulosic ethanol, of course, on 

corn stover, where we see a feedstock that exists today and that 

is accessible today and that we can grow immediately. Butanol, butanol is a technology that we can apply in the existing ethanol industry, converting the industry to a more valuable product.- 

So, obviously there is long-term potential for algae and we do 

some research work in it. But we focus right now on cellulosic ethanol and butanol which we, as I stated before, expect to commercialize in the near term. 

Mr. KISER. Senator, we are happy to build an engine to run on 

anything. Give us the appropriate lead time, your make sure the 

certification fuel of the EPA matches and the fuel is in the marketplace, we are happy to do it. We are currently testing isobutanol 

with a couple of our engine manufacturers. It does not act as an 

alcohol. The challenge with ethanol, you are burning it with gasoline, and it is a challenge. 

So, there are biofuels that thus far show tremendous promise. 

But—— 

Senator WHITEHOUSE. The lipid technology that Michael 

McAdams was talking about comes through just as oil, not as ethanol. 

Mr. KISER. We do not have a problem with it. 

Senator WHITEHOUSE. Mr. Faber. 

Mr. FABER. Senator, all I will say is that we support any of these 

fuels that do not pit our food security needs against our energy security needs. So, anything that can accelerate the development of 

fuel feedstocks that do not divert food and feed into our fuel supplies would be a terrific development. 

Senator WHITEHOUSE. Mr. Coleman, if you could add, since you 

are here on behalf of the ethanol folks. It seems to me that there 
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is a fairly healthy relationship between the algae industry and the 

ethanol industry and that the algae industry is able to absorb and 

put to use what would otherwise be carbon dioxide emissions produced in the course of the development of the ethanol. Correct? 

Mr. COLEMAN. That is true. 

Senator WHITEHOUSE. It is symbiotic. 

Mr. COLEMAN. Yes. You are hitting on a couple of points. I am 

a great believer in the continuum theory, that this renewable fuels 

industry will continue to evolve. Someone producing ethanol from 

corn, when corn goes to, if there is one thing I have in common 

with Scott it is that high corn prices can be a problem at the production level, right? So, corn ethanol folks see $7 corn they look for 

alternative feedstocks. So they have an interest in not only sequestering carbon, but also figuring out other ways to produce their 

product. 

When you grow algae, you can produce oil and you can produce 

ethanol from the biomass that you are producing. So that is a huge 

benefit. The other one, and this is the most important one for your 

company, is that it is tricky to finance a plant no matter what type 

of energy source you are. 

When you develop your technology, it is tremendously helpful to 

reach out to people that have already that steel in the ground and 

say, we have an option, we have a bolt on solution that will help 

you in three different ways. 

So, that is a huge issue for us. 

Senator WHITEHOUSE. Very good. 

Senator Inhofe. 

Senator INHOFE. Thank you, Mr. Chairman. 

You now, I was the guy who requested this hearing and this has 

been actually better than I thought it would be. We have gotten 

some great responses. 

Now, I want to give you, I do not think I need Mr. McAdams and 

Mr. Koninckx to tell you that I am a strong supporter of cellulosic. 

My only thing, in the legislation that I have, is purely corn ethanol, 

it does not reflect anything else. 

Look at our State of Oklahoma. Switchgrass. Look what the 

Noble Foundation is doing. Look at Oklahoma State University. We 

are a big player in this. So, I want to make sure everyone understands that I am on your side on that. 

I think you did a good job, Mr. Faber, in talking about the costs. 

We quite often, and you specifically talked about the CBO and 

their numbers as to what it is going to cost in terms of increased 

fuel costs. 

One thing that was not discussed, and I will go back to you, Mr. 

Kiser, on this, that concerns me, I suspect that of all of the 100 

Senators, I use chainsaws more than anybody else does. I pride 

myself every weekend in doing something that I know that no 

other U.S. Senator is doing. So, I cut down the trees and I split 

all the woods for all 20 of my kids and grandkids. So, I know something about that. 

Now, we know what can happen in terms of damage, let us say, 

in a chainsaw. Someone is putting in a blend that is damaging it, 

causes it to stick, it stays on, and with today’s tort laws and all 

of that, have you ever looked at how this is going to affect people 
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in terms of safety but then, connected to that, the lawsuits that 

could come up? I mean, with a chainsaw, it is easy to lose your life. 

You know what the tort system is out there. 

Any thoughts about that? 

Mr. KISER. Certainly. Senator, we are acutely aware of this problem. We are consumer products companies. Our names are on those 

things. We care about our customers’ safety. In particular, a 

chainsaw, and any open clutch-to-blade equipment, you have hit it 

right on the head, is alcohol advances the RPMs. The machine 

thinks it is throttling up and the blade will move, simply move, 

when it is in neutral. 

So this presents a very real safety problem for any user, whether 

it is seated, I mean, if you have ever watched a professional forester, they throw these things around like handbags. They carry 

them up and down trees and hang them on themselves. 

So it is a huge problem. It is a warranty issue as well. But when 

the warranty expires, our liability does not go away. 

Senator INHOFE. Exactly. 

Mr. KISER. You also potentially face a recall. These are companycrushing endeavors. If this fuel is in the marketplace, and it is x 

dollars, and EPA knows what those numbers are that trigger 

misfueling, and if you can foresee that the product might be 

misfueled and an injury may result, you may have to recall the 

product. 

Senator INHOFE. Well, not just recall the products, but if something happens, everyone is talking about it and you made the 

statement, you can produce anything to burn on anything. 

Mr. KISER. That is right. 

Senator INHOFE. But those things are still out there. In 1994, I 

was the, I guess, the reason that we passed the 18-year repos on 

aviation products and that put America back into an exporting position instead of importing on airplanes and airplane products. 

Well, that was great. It was 18 year repos. 

Now, you might say, wait a minute, something has been running 

fine for 18 years, it should not go beyond that. However, if you find 

somebody that does run on something that you are forced to buy, 

there are still going to be thousands and thousands of those out 

there that are going to come back to you, your manufacturer, long 

after, years after they have been performing well, just due to the 

blend that they are—— 

Mr. KISER. Yes, sir. 

Senator INHOFE. Am I off base on that? Am I missing something? 

Mr. KISER. It is in the millions. In the marine industry, if your 

machine, if your engine fails and you are 30 miles offshore, this is 

a huge problem. If you are on a snow machine and it fails in the 

wilderness, this is a huge problem. 

So, again, we are not anti-ethanol. We are not opposed to these 

fuels. But we want to educate that if this fuel is going to be in the 

marketplace, you have to educate the folks about how, what fuel 

goes in what and, in particular, a blender pump. 

Senator INHOFE. Yes, I would only correct you in saying you can 

educate them all they want, but if they end up losing their lives, 

all the education in the world is not going to help that. 
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In Oklahoma we still now, it may not last long, but as it is now 

we have a choice. In Oklahoma there are big signs on every major 

filling station, we sell no ethanol, no corn in our gas. That is all 

over the place. So while the supply and demand varies from State 

to State, I can assure you in Oklahoma what it is. 

So, I would assume then, if we had an opportunity to opt out, 

keeping in mind now, I say to our friends on the left side here, this 

only affects corn ethanol, nothing else. If there is an opportunity 

to opt out of this, and I would say the same thing to you, Mr. 

Faber, would that not pretty much solve this problem? It is choice. 

If you want any kind of ethanol you can have it, but if you want 

clear gas you can have that, too. 

Mr. FABER. I think to your point, and to the question that Senator Johanns asked, FAPRI, which is in some respects the final 

word on agricultural economics, has looked at this question of what 

if you change the mandate, eliminate the mandate, eliminate the 

tariff, eliminate the tax credit, and what would happen to ethanol 

production? 

There would still be a significant amount of ethanol production, 

depending on the year, but there would not be as much. The price 

of ethanol would be lower. The price of corn, and ultimately the 

price of food and feed, would be lower. So, you would continue to 

have a mature industry that would be competitive with other makers of fuels. You just would not be spending $6 billion a year in 

subsidies and limiting consumer choice. 

Senator INHOFE. Americans can have the choice. This is the 

thing that has been different in America than in any other country. 

Thank you, Mr. Chairman. 

Senator WHITEHOUSE. Thank you. 

I just wanted, before I, do you want to do another round or are 

you ready to conclude? 

Senator INHOFE. I am ready to conclude. 

Senator WHITEHOUSE. OK. Let me just ask one last question of 

Mr. Kiser. I take the prerogative of the Chair, since I am also Senator from the Ocean State, and give you the opportunity to elaborate just a little bit on your remarks with regard to marine use of 

the fuel and what your recommendations are with respect to the 

particular issues that marine use and saltwater use of the fuel 

raise. 

Mr. KISER. I would note that the National Marine Manufacturers 

is a co-participant with OPEI on both the petition to ask EPA to 

make a formal rulemaking on misfueling, to look at misfueling 

mechanisms beyond the label to help educate folks. The National 

Marine Manufacturers Association was also one of the petitioners 

with us in challenging the decision. I note that the Coast Guard 

weighed in in opposition to the E–15 waiver because of its potential 

effect in the marine industry. 

Their engines, like our own, are simply not designed for the product. They can design a product for it. Now, they are a little more 

challenged because alcohol absorbs water. You bring water into the 

engine, a, it is corrosive, but it also phase separates. So, they are 

uniquely challenged. Probably of all the non-road community, marine has a very tough road here and certainly maybe in the marina 
131 

environment or in ocean environments, a legacy fuel or an easy or 

neat fuel should be made available for the foreseeable future. 

They also have a very long lifetime span. Legacy products in my 

field, maybe 10 or 20 years. You have boats, 30, 40, 50 years old, 

same thing with automobiles, legacy automobiles, that are collectibles. None of this stuff is designed for, and especially a fiberglass 

tanked boat. You simply cannot run E–10 in it. It will break up the 

resin. So, the marine folks are genuinely challenged here. 

Mr. COLEMAN. Mr. Chair, could I comment on that before you 

finish? 

Senator WHITEHOUSE. Sure. 

Mr. COLEMAN. From the perspective, just quickly on this choice 

thing, from the perspective of the advanced ethanol industry with 

regard to opt out, I think the common ground here is we want to 

give consumers a choice. We want to give them a choice not just 

to opt out, but to opt in, because if you give them a choice just to 

opt out, you are going to have a situation where you weaken the 

existing industry. 

There is a plant in Southwestern Kansas right on the border on 

Oklahoma, they are going to do a cellulosic ethanol biofuels plant. 

It is an integrated plant but it is financed on the back of a company that is healthy because they are selling corn ethanol. So we 

do not want to weaken the ethanol industry while we move toward 

choice. 

I think the ultimate situation is where the consumer can dial it 

up to 30 or 40, but then they can dial it down for zero if they want 

to go offshore. I am a boat owner and I can certainly sympathize 

with that. But we need to work on opt up and opt down. 

Senator INHOFE. Well, that sounds good. The only problem with 

that is we are right up against the blend wall in my State of Oklahoma today. I mean you can always opt up. The point is what you 

cannot get is clear gas. You can now. But as we get closer to that 

wall, we see that time coming to an end. 

I am not going to subject my farmers, some people do not realize, 

you commented you are a coastal State. Oklahoma has more miles 

of freshwater shoreline than any State of all 50 States. Not many 

people realize that. So, it is a huge industry there. 

Well, anyway, thank you, Mr. Chairman. 

Mr. MCADAMS. Mr. Chairman, I just wanted to make one comment in the other direction. That is as you see these new molecules 

and the advances in cellulosic coming into the market, they are different than the molecules we have used in the past. 

So what you have, the oversight function in this committee is attached to the Clean Air Act. EPA, moving forward, is going to have 

to prove, under Tier 1 and Tier 2, the gasoline molecules that come 

into the market. They are also going to have to approve, under the 

RIN certification procedures, whether the feedstocks, processes or 

products fit under the definitions of the RFS II. 

So, through your oversight, you need to be very careful because 

our regulatory structure, driven by the Clean Air Act for gasoline 

and diesels, has predominantly been skewed for ethanol and biodiesel up to this point because that is where the volumes have 

been. We need to have a regulatory framework harmonized with 
132 

the intention of the RFS II, moving forward, so we can deploy these 

new molecules. 

Thank you. 

Senator WHITEHOUSE. All right. Well, I thank the witnesses very 

much. 

I want to thank the Ranking Member for his leadership and pulling this hearing together. I agree with him that it has been very 

helpful and instructive. 

Once again, I thank all of the witnesses. 

I think we will leave the record of the hearing open for an additional week in case anybody wishes to add anything. But subject 

to that 1-week for the record, the hearing is hereby adjourned. 

[Whereupon, at 11:55 a.m., the committee was adjourned.] 

[Additional statements submitted for the record follow.] 

STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM THE

STATE OF DELAWARE

As many of you know, next week is the 41st anniversary of Earth Day, a day that 

is near and dear to my heart. Next week is also another anniversary—one that is 

far more tragic—the 1-year anniversary of the BP/Deepwater Horizon oil spill. I 

think that today, more than ever, Americans understand the need to develop domestic sources of renewable energy, and the need for us to become energy independent. 

Energy independence is something that we have talked about in this country for a 

long time. 

Today’s hearing provides us with an opportunity to assess if we are indeed meeting some of the key time-tables and targets that were established in 2007 to put 

us on a path toward energy independence. Appropriately named, the Energy Independence and Security Act of 2007 established a second phase in the EPA’s Renewable Fuel Standards program that increased the demand for second generation 

biofuels. These new biofuels were to be cleaner in emissions and were to be made 

from renewable materials other than food stocks such as corn. I supported this effort 

because I believe biofuels done right are a good thing. Biofuels can give us an environmentally friendly option to move away from foreign fossil fuels and safeguard 

our energy security. 

However, since 2007 we’ve not seen the increases in next generation biofuels as 

we had hoped. This country continues to depend on biofuels that compete with our 

food supply and may be impacting our air quality. Many of you here have heard 

me say that I believe the role of government is to steer the boat, not row the boat. 

Today, we will be grading our driving skills to see, are we steering in the right direction toward energy independence? Today, we will ask if the government is providing the right incentives to spur investment and production of the next generation 

of biofuels. Are we providing the certainty businesses need to invest in the new 

technology that we lead us to these new fuels? 

I look forward to hearing from our witnesses to see what advances have been 

made and what the government could do better to help our companies develop better biofuels. I’m also interested in learning how our current renewable fuel standard 

has impacted all-aspects of our economy and our air quality. 

In closing, I believe the Renewable Fuels Standard must be implemented in a 

manner that positively impacts energy security, the environment and the economy. 

I look forward to working with my colleagues on this committee to make sure this 

happens. Madame Chair, thank you. And, to our witnesses today, welcome. 
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